MERCANTILE BANCORP, S-1/A Filing

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                                  As filed with the Securities and Exchange Commission on August 20, 2010
                                                                                           Registration Statement No. 333-168075



                    UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                                                Washington, D.C. 20549

                                                                    Amendment No. 1
                                                                         to

                                                                        Form S-1
                                                       REGISTRATION STATEMENT
                                                                UNDER
                                                       THE SECURITIES ACT OF 1933

                                     MERCANTILE BANCORP, INC.
                                                        (Exact Name of Registrant as Specified in Its Charter)


                                                                             Delaware
                                                    (State or other jurisdiction of incorporation or organization)


                                                                                6022
                                                     (Primary Standard Industrial Classification Code Number)


                                                                           37-1149138
                                                               (I.R.S. Employer Identification Number)


                                                                     200 N. 33rd Street
                                                                    Quincy, Illinois 62301
                                                                       (217) 223-7300
                         (Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


                                                                  Ted T. Awerkamp
                                                        President and Chief Executive Officer
                                                               Mercantile Bancorp, Inc.
                                                       200 N. 33rd Street, Quincy, Illinois 62301
                                                                    (217) 223-7300
                                (Name, address, including zip code, and telephone number, Including area code, of agent for service)




                                                                             Copies to:

                                                                   Michael P. Reed, Esq.
                                                                  Yvan-Claude Pierre, Esq.
                                                                    DLA Piper LLP (US)
                                                                   500 Eighth Street, NW
                                                                   Washington, DC 20004
                                                                       (202) 799-4000

         As soon as practicable after the effective date of this Registration Statement (Approximate date of commencement of
      proposed sale to the public)

         If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415
      under the Securities Act of 1933 check the following box: 
    If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement for
the same offering. 

     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering. 

   Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of ―large accelerated filer,‖ ―accelerated filer‖ and ―smaller reporting company‖ in
Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer                Accelerated filer           Non-accelerated filer         Smaller reporting company 
                                                          (Do not check if a smaller reporting company)

    The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with section 8(a) of the securities act of 1933 or until the Registration
Statement shall become effective on such date as the securities and exchange commission, acting pursuant to section 8(a),
may determine.
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       The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with
       the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy
       these securities in any state where the offer or sale is not permitted.

                                             SUBJECT TO COMPLETION, DATED AUGUST 20, 2010

      PRELIMINARY PROSPECTUS




                                            Mercantile Bancorp, Inc.
                                          8,703,330 Subscription Rights
                      Up to 8,703,330 shares of Common Stock issuable as part of the Units
                                issuable upon exercise of the Subscription Rights
                    Up to 8,703,330 Warrants to purchase Common Stock issuable as part of
                           the Units issuable upon exercise of the Subscription Rights
             Up to 8,703,330 shares of Common Stock issuable upon exercise of the Warrants
          We are distributing at no charge to the holders of our common stock, $0.4167 par value per share, on [ • ], 2010, which we refer
      to as the record date, subscription rights to purchase up to 8,703,330 Units. One Unit consists of one share of our common stock and
      one warrant to purchase one share of our common stock.

          You will receive one subscription right for each share of our common stock that you owned as of 5:00 p.m., New York City
      time, [ • ], 2010. You will not receive any fractional rights, as the aggregate number of subscription rights you receive will be
      rounded up to the next largest whole number. Subscribers who exercise their rights in full may over-subscribe for additional Units,
      subject to certain limitations, to the extent Units are available. Each subscription right entitles you to purchase one Unit at a
      subscription price equal to [ • ] per whole Unit. As of [ • ], 2010, the last reported sale price of a share of our common stock is [ • ].

           The subscription rights are exercisable beginning on the date of this prospectus and continuing until 5:00 p.m., New York City
      time, on [ • ], 2010. We may extend the period for exercising subscription rights in our sole discretion. If you want to participate in
      this rights offering and you are the record holder of your shares, we recommend that you submit your subscription documents to the
      subscription agent, Illinois Stock Transfer Co., before that deadline. If you want to participate in this rights offering and you hold
      shares through your broker, dealer, bank or other nominee, you should promptly contact your broker, dealer, bank or other nominee
      and submit your subscription documents in accordance with the instructions and within the time period provided by your broker,
      dealer, bank or other nominee. Please see page 33 for further instructions on submitting subscriptions. Subscriptions will, in our
      discretion, be accepted when received, and if so accepted will not be held in escrow by the subscription agent through the expiration
      of this rights offering. We reserve the right to cancel this rights offering at any time prior to the acceptance of any subscriptions.

           Stockholders who do not participate in this rights offering will continue to own the same number of shares of our common
      stock, but will own a smaller percentage of the total shares of our common stock issued and outstanding after this rights offering to
      the extent that other stockholders participate in this rights offering. Subscription rights that are not exercised prior to the expiration
      of this rights offering will expire and have no value. There is no minimum number of Units that we must sell in order to complete
      this rights offering.

          As of [ • ], 2010, the aggregate market value of our outstanding common stock held by non-affiliates was approximately $[ • ],
      based on approximately [ • ] shares held by non-affiliates, and a per share price of $[ • ] based on the last reported sale price of our
      common stock on [ • ], 2010.

          You should carefully consider whether to exercise your subscription rights before the expiration date. All exercises of
      subscription rights are irrevocable. Our board of directors is making no recommendation regarding your exercise of the subscription
      rights. Investing in our securities involves a high degree of risk. In addition, your holdings in our company will be diluted if
      you do not exercise the full amount of your basic subscription rights. See “Risk Factors” beginning on page 11 of this
      prospectus.
    Our common stock is quoted on the NYSE Amex under the symbol ―MBR.‖ The last reported sale price of our common stock
on [ • ], 2010 was $[ • ] per share.
                                                                                                   Dealer Manager                           Proceeds, Before
                                                          Subscription                                                                         Expenses,
                                                             Price                                     Fee(1)                                    to Us



Per Unit
Total(2)



 (1) We have agreed to pay to McClendon, Morrison & Partners, Inc. as compensation an advisory fee equal to 2% of the gross proceeds from the exercise of
     rights in this rights offering, subject to certain exceptions (including with respect to any proceeds from rights exercised by R. Dean Phillips or his related
     entities or affiliates), upon completion of this rights offering, and up to $75,000 in expenses. We are also obligated to pay any broker-dealer where the holder
     exercising such rights indicates in writing that such broker-dealer has solicited such exercise, a cash commission of up to 3% of the gross proceeds from the
     exercise of such right by the rights holder.

 (2) Assumes that this offering is fully subscribed and that the maximum offering amount in the aggregate of $[ • ] is subscribed.

    Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of
these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal
offense. None of the subscription rights, units, common stock, warrants or common stock underlying the warrants are deposits,
savings accounts, or other obligations of a bank or savings association and none of them is insured by the FDIC or any other
governmental agency. The securities are not being offered in any jurisdiction where the offer is not permitted under applicable local
laws.

                                                                         Dealer-Manager
                                   McClendon, Morrison & Partners, Inc.
                                                         The date of this prospectus is [ • ], 2010.
                                                TABLE OF CONTENTS


                                                                                                                    Page


About This Prospectus                                                                                                   ii
Other Information                                                                                                       ii
Cautionary Statement Regarding Forward-Looking Statements                                                               ii
Questions and Answers About the Rights Offering                                                                        iv
Prospectus Summary                                                                                                      1
The Rights Offering                                                                                                     6
Summary Consolidated Financial Information and Other Data                                                               9
Risk Factors                                                                                                           11
Use of Proceeds                                                                                                        21
Capitalization                                                                                                         22
Description of Securities                                                                                              24
The Rights Offering                                                                                                    30
Material U.S. Federal Income Tax Considerations                                                                        37
Plan of Distribution                                                                                                   39
Legal Matters                                                                                                          39
Experts                                                                                                                39
Where You Can Find More Information                                                                                    39
Incorporation of Certain Information by Reference                                                                      40
Information Not Required in Prospectus                                                                               II-1
Signatures                                                                                                           II-3
Exhibit Index
  EX-1.1
  EX-8
  EX-23.1

      You may rely on the information contained or incorporated by reference in this prospectus. We have not
authorized anyone to provide information different from that contained or incorporated by reference in this
prospectus. When you make a decision about whether to invest in the Units, you should not rely upon any
information other than the information contained or incorporated by reference in this prospectus. Neither the
delivery of this prospectus nor the sale of Units pursuant to exercise of the subscription rights means that the
information contained in this prospectus is correct after the date of this prospectus. This prospectus is not an offer to
sell or solicitation of an offer to buy these Units in any circumstances under which the offer or solicitation is unlawful.


                                                             i
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                                                         ABOUT THIS PROSPECTUS

              Unless the context otherwise requires, all references to ―Mercantile‖ ―we,‖ ―us,‖ ―our,‖ ―the company,‖ or similar
         language in this prospectus refer to Mercantile Bancorp, Inc., an Illinois banking corporation, and its consolidated
         subsidiaries.

              You should rely only on the information contained in this document or in a document to which we have referred you.
         We have not authorized anyone to provide you with information that is different. If anyone provides you with different or
         inconsistent information, you should not rely on it. For further information, please see the section of this prospectus entitled
         ―Where You Can Find More Information.‖ We are not making an offer to sell these securities in any jurisdiction where the
         offer or sale is not permitted or in which the person making the offer or solicitation is not qualified to do so or to anyone to
         whom it is unlawful to make the offer or solicitation. You should assume that the information appearing in this prospectus is
         accurate as of any date other than the dates on the front cover of this prospectus, regardless of the time of delivery of this
         prospectus, the time of any exercise of the subscription rights or any sale of a security. Our business, financial condition,
         results of operations and prospects may have changed since that date of this prospectus.

               We obtained statistical data, market data and other industry data and forecasts used throughout this prospectus and the
         documents incorporated herein by reference from market research, publicly available information and industry publications.
         Industry publications generally state that they obtain their information from sources that they believe to be reliable, but they
         do not guarantee the accuracy and completeness of the information. Similarly, while we believe that the statistical data,
         industry data and forecasts and market research are reliable, we have not independently verified the data, and we do not
         make any representation as to the accuracy of the information. We have not generally sought the consent of the sources to
         refer to their reports appearing in this prospectus or the documents incorporated herein by reference.

              This prospectus and the documents incorporated herein by reference contain trademarks, tradenames, service marks and
         service names of Mercantile Bancorp, Inc.


                                                           OTHER INFORMATION

              Our principal executive office is located at 200 North 33rd Street, Quincy, Illinois 62301. Our telephone number is
         217-223-7300. Our website address is www.mercbanx.com. The information found on, or otherwise accessible through, our
         website is not incorporated into, and does not form a part of, this prospectus or any other document we file or furnish to the
         Securities and Exchange Commission, or the SEC. If you have any questions or need further information about this offering,
         please contact Morrow & Company, LLC, our information agent for this offering, at (203) 658-9400 (for brokerage firms
         and banks) or toll-free at (800) 607-0088 (for stockholders).


                         CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

              This prospectus, including information incorporated by reference, contains ―forward-looking statements‖ (as that term
         is defined in the Private Securities Litigation Reform Act of 1995). These forward-looking statements may be identified by
         the use of such words as: ―believe‖, ―expect‖, ―anticipate‖, ―intend‖, ―plan‖, ―estimate‖, or words of similar meaning, or
         future or conditional verbs such as ―will,‖ ―would,‖ ―should,‖ ―could,‖ or ―may.‖

              Examples of forward-looking statements include, but are not limited to, estimates or projections with respect to our
         future financial condition, results of operations or business, such as:

               • projections of revenues, income, earnings per share, capital expenditures, assets, liabilities, dividends, capital
                 structure, or other financial items;

               • descriptions of plans or objectives of management for future operations, products, or services, including pending
                 acquisition transactions;

               • forecasts of future economic performance; and

               • descriptions of assumptions underlying or relating to any of the foregoing.
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              Many possible factors or events could affect our future financial results and performance and could cause those
         financial results or performance to differ materially from those expressed in the forward-looking statements. These possible
         events or factors include, without limitation:

               • the effects of current and future business and economic conditions in the markets we serve change or are less
                 favorable than we expected;

               • deposit attrition, operating costs, customer loss and business disruption are greater than we expected;

               • competitive factors, including product and pricing pressures among financial services organizations may increase;

               • the effects of changes in interest rates on the level and composition of deposits, loan demand, the values of loan
                 collateral, securities and interest sensitive assets and liabilities may lead to a reduction in our net interest margins;

               • changes in market rates and prices may adversely impact our securities, loans, deposits, mortgage servicing rights,
                 and other financial instruments;

               • the legislative or regulatory developments, including changes in laws and regulations concerning taxes, banking,
                 securities, insurance and other aspects of the financial securities industry, such as the recently enacted Dodd-Frank
                 Wall Street Reform and Consumer Protection Act (the ―Dodd-Frank Act‖), and the extensive rule making it requires
                 to be undertaken by various regulatory agencies may adversely affect our business, financial condition and results of
                 operations;

               • personal or commercial bankruptcies increase;

               • our ability to expand and grow our business and operations, including the establishment of additional branches and
                 acquisition of additional banks or branches of banks may be more difficult or costly than we expected;

               • any future acquisitions may be more difficult to integrate than expected and we may be unable to realize any cost
                 savings and revenue enhancements we may have projected in connection with such acquisitions;

               • changes in accounting principles, policies or guidelines;

               • credit risks, including credit risks resulting from the devaluation of collateral debt obligations and/or structured
                 investment vehicles on the capital markets to which we currently have no direct exposure;

               • the failure of assumptions underlying the establishment of our allowance for loan losses;

               • construction and development loans are based upon estimates of costs and value associated with the complete
                 project. These estimates may be inaccurate, and cause us to be exposed to more losses on these projects than on
                 other loans;

               • changes that occur in the securities markets;

               • technology-related changes may be harder to make or more expensive than we anticipated;

               • worldwide political and social unrest, including acts of war and terrorism; and

               • changes in monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the
                 Federal Reserve Board.

               Any forward-looking statements made in this prospectus or incorporated by reference herein are made as of the date of
         this prospectus and we assume no obligation to update the forward-looking statements or to update the reasons why actual
         results could differ from those projected in the forward-looking statements. You should consider these risks and uncertainties
         in evaluating forward-looking statements and you should not place undue reliance on these statements. You should
         understand that it is not possible to predict or identify all such risks and uncertainties. Consequently, you should not consider
these risks and uncertainties, or the risks described in ―Risk Factors‖ in this prospectus, to be a complete discussion of all
potential risks and uncertainties associated with an investment in us or our securities.


                                                                iii
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                                    QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING

              The following are questions that we anticipate you may have about this rights offering. The answers are based on
         selected information from this prospectus. The following questions and answers do not contain all of the information that
         may be important to you and may not address all of the questions that you may have about whether to exercise your
         subscription rights. We urge you to read the entire prospectus.

              Exercising the rights and investing in our securities involves a high degree of risk. We urge you to carefully read the
         section entitled “Risk Factors” beginning on page 11 of this prospectus, as well as the documents listed under the section
         “Incorporation of Certain Information by Reference” in their entirety before you decide whether to exercise your rights.


         What is this rights offering?

              We are distributing, at no cost or charge to our stockholders, subscription rights, which we also refer to as rights,
         consisting of a basic subscription right to purchase Units consisting of one share of our common stock and one warrant to
         acquire one share of our common stock, and an over-subscription right to purchase additional Units. These rights may be
         exercised only by the stockholders to whom they are distributed, and may not be sold, transferred or assigned to anyone else,
         other than by operation of law. Holders of our common stock will receive one basic subscription right for each share of
         common stock held of record as of 5:00 p.m., New York City time, on [ • ], 2010, the record date of this rights offering. The
         subscription rights will be evidenced by subscription rights certificates. Each basic subscription right will entitle you to
         purchase one Unit at a subscription price equal to $[ • ] per Unit. You may exercise any number of your basic subscription
         rights, or you may choose not to exercise any basic subscription rights. We will not distribute fractional subscription rights,
         but instead we will round up the aggregate number of subscription rights you receive to the next whole number.

              This rights offering is an opportunity for you to purchase Units at a fixed price and in an amount proportional to your
         existing interest in our common stock. If you exercise your basic subscription right in full, you will then be entitled to
         exercise your over-subscription right. This enables you to maintain, or if other stockholders of our common stock do not
         exercise their subscription rights, to increase your current percentage ownership interest in us.


         What is a Unit?

              Each Unit is comprised of one share of our common stock and a warrant to acquire one share of our common stock at
         an exercise price of $[ • ] per share.


         What are the material terms of the warrants being offered in this rights offering?

              The warrants that we are offering in this rights offering will be a five-year warrant to purchase one share of our
         common stock at an exercise price of $[ • ] per share, subject to our right to redeem the warrants at any time after the second
         anniversary of the distribution date if the price of a share of our common stock exceeds 150% of the exercise price of the
         warrant ($[ • ] per share) for 60 consecutive days.


         Why are we engaging in this rights offering, and how will we use the proceeds from this rights offering?

               In light of current economic conditions generally we have decided to pursue this rights offering to raise capital which
         can be used to support us and our subsidiary banks and improve our capital position. Our board of directors also considered
         other alternatives available for raising equity capital and determined that this rights offering was in our best interests and
         those of our stockholders. Because our stock price is well below the current book value of our shares of common stock, we
         believe that giving our current stockholders the right to purchase our shares is the fairest and most equitable approach to
         raising capital. This rights offering will give you the opportunity to participate in our capital raising and maintain, or if other
         stockholders do not exercise their subscription rights, to increase your proportional ownership interest in us. We will have
         broad discretion in determining how the net proceeds of this rights offering will be used. We currently intend to use the net
         proceeds of this rights offering for general corporate purposes, including contribution of amounts to the capital of, and to
         support, our subsidiary banks.


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         How was the $[ • ] per Unit subscription price determined?

              Our board of directors determined that the subscription price should be designed to provide a reasonable price for our
         current stockholders to exercise their subscription rights and our board of directors concluded that the subscription price was
         a reasonable price. Factors considered by our board of directors in determining the subscription price included the amount of
         proceeds desired, the market price of our common stock historically and during the last 30 days, the volatility of the market
         price of our common stock, general conditions in the securities markets, our recent operating results, our financial condition,
         general conditions in the financial services industry, alternatives available to us for raising equity capital, the liquidity of our
         common stock and the fact that we are providing subscribers with an additional benefit in the form of the warrants.
         Ultimately, the subscription price is set using the approximate midpoint of a range between the price equal to 90% of the
         volume weighted average price of our common stock during the 30 trading days preceding the announcement of this rights
         offering and the most recent low closing price of our common stock. In addition, our board of directors engaged McClendon,
         Morrison & Partners, Inc. to advise them with respect to whether this rights offering was a reasonable means, from a
         financial point of view, of raising capital to address the capital and liquidity needs of us and our subsidiary banks.

               The subscription price is not necessarily related to our book value, results of operations, cash flows, financial condition,
         net worth or any other established criteria of value and may or may not be considered the fair value of our common stock at
         the time this rights offering was approved by our board of directors or during the rights offering period. Because the
         subscription price is based on a range that included the 30-day volume weighted average of the trading price of our common
         stock preceding the announcement of this rights offering, it may be above the trading price of our common stock as of the
         date hereof and if the trading price is above the subscription price, it may be advantageous for stockholders to purchase
         additional shares of our common stock on the NYSE Amex rather than pursuant to this rights offering. We cannot assure you
         that the trading price of our common stock will not decline during or after this rights offering. We also cannot assure you
         that you will be able to sell shares purchased in this offering at a price equal to or greater than the subscription price. We do
         not intend to change the subscription price in response to changes in the trading price of our common stock prior to the
         closing of this rights offering.


         Am I permitted to purchase additional Units other than what my basic subscription right entitles me to purchase?

               Yes. There are over-subscription rights available in this rights offering.


         Are we requiring a minimum subscription to complete the rights offering?

               We are not requiring minimum subscriptions to complete this rights offering.


         What is the over-subscription right?

              The over-subscription right contained in each subscription right entitles you, if you have fully exercised your basic
         subscription right, to subscribe for additional Units at the same subscription price per share on a pro rata basis, if any Units
         are not purchased by other holders of subscription rights under their basic subscription rights as of the expiration date. ―Pro
         rata‖ means in proportion to the aggregate number of Units that all subscription rights holders who have fully exercised their
         basic subscription rights and have requested to purchase pursuant to the over-subscription right would own prior to the
         exercise of any over-subscription rights. No subscriber can own, as a result of the exercise of their rights or the
         oversubscription rights, a number of shares, and warrants to acquire shares, of our common stock which would result in such
         subscriber owning, as of the consummation of the rights offering, in excess of 9.9% of our common stock, on a fully-diluted
         basis. See ―The Rights Offering — Over-Subscription Right.‖


         What if there is an insufficient number of Units to satisfy the over-subscription requests?

              If there is an insufficient number of Units available to fully satisfy the over-subscription requests of rights holders,
         subscription rights holders who exercised their over-subscription right will receive the available Units pro rata based on the
         aggregate number of Units each subscription rights holder who has subscribed for under the over-subscription right would
         own prior to the exercise of any over-subscription rights. Any excess subscription


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         payments will be returned, without interest or deduction, promptly after the expiration of the rights offering. See ―The Rights
         Offering — Over-Subscription Right.‖


         Who may participate in this rights offering?

               Holders of record of our common stock as of 5:00 p.m., New York City time, on [ • ], 2010, are entitled to participate in
         this rights offering.


         Am I required to subscribe in this rights offering?

               No. However, any stockholder who chooses not to fully exercise its basic subscription rights will experience dilution of
         its equity interest in the company to the extent that other stockholders exercise their subscription rights.


         How long will this rights offering last?

              You will be able to exercise your subscription rights only during a limited period. To exercise your subscription rights,
         you must do so by 5:00 p.m., New York City time, on [ • ], 2010, unless we extend this rights offering. Accordingly, if a
         rights holder desires to exercise its subscription rights, unless the guaranteed delivery procedures are followed, the
         subscription agent must actually receive all required documents and payments from the rights holder before the expiration
         time. We may extend the expiration time for any reason.


         When will subscriptions be accepted?

               We may, in our discretion, accept basic subscriptions from time to time when received rather than at the expiration of
         the rights offering period. If we accept any basic subscriptions prior to expiration of the offering period, all basic
         subscriptions then received in due form will be accepted. Over-subscription rights will not be accepted until the rights
         offering period has terminated.


         How do I exercise my subscription rights?

              You may exercise your subscription rights by properly completing and signing your subscription rights certificate and
         delivering it, with full payment of the subscription price for the Units for which you are subscribing for the exercise of your
         basic subscription right and, if you so choose, your over-subscription right, to the subscription agent at or prior to the
         expiration time. If you send the subscription rights certificate and other items by mail, we recommend that you send them by
         registered mail, properly insured, with return receipt requested. If you cannot deliver your subscription rights certificate to
         the subscription agent on time, you may follow the guaranteed delivery procedures described under ―The Rights Offering —
         Guaranteed Delivery Procedures.‖ If you are exercising your subscription rights through your broker, dealer, bank or other
         nominee, you should promptly contact your broker, dealer, bank or other nominee and submit your subscription documents
         and payment for the Units subscribed for in accordance with the instructions and within the time period provided by your
         broker, dealer, bank or other nominee.


         What if my shares are not held in my name?

              If you hold your shares of our common stock in the name of a broker, dealer, bank or other nominee, then your broker,
         dealer, bank or other nominee is the record holder of the shares you own. The record holder must exercise the subscription
         rights on your behalf for the Units you wish to subscribe for. Therefore, you will need to have your record holder act for you.

               If you wish to participate in this rights offering and purchase Units, please promptly contact the record holder of your
         shares. We will ask the record holder of your shares, who may be your broker, dealer, bank or other nominee, to notify you
         of this rights offering.


         May the board of directors cancel this rights offering?

              Yes. The board of directors may decide to cancel this rights offering prior to the acceptance of any subscriptions at any
         time for any reason.
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         If this rights offering is terminated, will my subscription payment be refunded to me?

               Yes. If we terminate this rights offering, all subscription payments will be returned as soon as practicable following the
         termination. We will not pay interest on, or deduct any amounts from, subscription payments if we terminate this rights
         offering. If we terminate this rights offering, we will not be obligated to issue Units to rights holders who have exercised
         their subscription rights prior to termination.


         May I transfer, sell or give away my subscription rights?

              No. You may not sell, give away or otherwise transfer your subscription rights. However, your subscription rights may
         be transferred to your affiliates or by operation of law, for example, upon death. See ―The Rights Offering —
         Non-Transferability of Subscription Rights.‖


         How many Units may I purchase?

              You will receive one subscription right for each share of our common stock that you owned as a holder of record as of
         5:00 p.m., New York City time, on [ • ], 2010. We will not distribute fractional subscription rights, but instead we will round
         up the aggregate number of subscription rights you receive to the next whole number. Each subscription right entitles you to
         purchase one Unit at a subscription price equal to $[ • ] per Unit. In addition, you may exercise your over-subscription right,
         subject to proration and limited to that number of shares and warrants to acquire shares which would result in you owning, as
         of the consummation of the rights offering, no more than 9.9% of our common stock, on a fully-diluted basis. See ―The
         Rights Offering — Over-Subscription Right‖.


         Are there risks associated with exercising my subscription rights?

              Yes. The exercise of your subscription rights involves buying additional shares of our common stock and warrants to
         acquire shares of our common stock and should be considered as carefully as you would consider the acquisition of
         additional shares of our common stock in the market or any other equity investment. Among other things, you should
         carefully consider the risks described under the heading ―Risk Factors‖ beginning on page 11.


         After I exercise my subscription rights, may I change my mind and cancel my purchase?

              No. Once you send in your subscription rights certificate and payment, you cannot revoke the exercise of your
         subscription rights, even if you later learn information about us that you consider to be unfavorable and even if the market
         price of our common stock is below the $[ • ] per Unit subscription price. However, if we amend this rights offering in a way
         which we believe is material, we will extend this rights offering and offer all rights holders the right to revoke any
         subscription submitted prior to such amendment upon the terms and conditions we set forth in the amendment. The extension
         of the expiration date of this rights offering will not, in and of itself, be considered a material amendment for these purposes.
         You should not exercise your subscription rights unless you are certain that you wish to purchase Units at a price of $[ • ] per
         Unit. See ―The Rights Offering — No Revocation of Exercised Subscription Rights.‖


         What happens if I choose not to exercise my subscription rights?

              You will retain your current number of shares of our common stock even if you do not exercise your subscription
         rights. However, if other stockholders exercise their subscription rights and you do not, the percentage of our issued and
         outstanding common stock that you own will diminish, and your voting and other rights will be diluted. Your subscription
         rights will expire and have no value if they are not exercised by the expiration time.


         Will I be charged any fees if I exercise my subscription rights?

              We will not charge a fee to holders for exercising their subscription rights. However, any holder exercising its
         subscription rights through a broker, dealer, bank or other nominee will be responsible for any fees charged by its broker,
         dealer, bank or other nominee.


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         What should I do if I want to participate in the rights offering, but I am a stockholder with a foreign address?

               Subscription rights certificates will not be mailed to foreign stockholders whose address of record is outside the United
         States and Canada, or is an Army Post Office (APO) address or Fleet Post Office (FPO). If you are a foreign stockholder,
         you will be sent written notice of this offering. The subscription agent will hold your rights, subject to you making
         satisfactory arrangements with the subscription agent for the exercise of your rights, and follow your instructions for the
         exercise of the rights if such instructions are received by the subscription agent at or before 11:00 a.m., New York City time,
         on [ • ], 2010, three business days prior to the expiration date (or, if this offering is extended, on or before three business
         days prior to the extended expiration date). If no instructions are received by the subscription agent by that time, your rights
         will expire without any payment to you of those unexercised rights.


         Will our officers, directors and significant stockholders be exercising their rights?

              Our officers, directors and greater than 5% beneficial stockholders may participate in this offering, but none of our
         officers, directors or greater than 5% beneficial stockholders are obligated to so participate.


         Will the subscription rights be listed on a stock exchange or trading market?

              No. The subscription rights may not be sold, transferred or assigned to anyone else and will not be listed on the NYSE
         Amex or any other stock exchange or trading market or on the OTC Bulletin Board. Our common stock trades on the NYSE
         Amex under the symbol ―MBR‖ and the shares of our common stock to be issued in connection with this rights offering
         (either directly or pursuant to exercise of the warrants issued in connection with this rights offering) will also be listed on the
         NYSE Amex under the same symbol. The warrants will not be listed on the NYSE Amex or any other stock exchange or
         trading market or on the OTC Bulletin Board. See ―The Rights Offering — Non Transferability of Subscription Rights.‖


         If I exercise my subscription rights, when will I receive the shares and warrants for which I have subscribed?

              We will issue the shares of our common stock and warrants comprising the Units for which subscriptions have been
         properly received as soon as practicable after this rights offering expires or, in our discretion, after acceptance, from time to
         time, of subscriptions relating to basic subscription rights.


         How many shares of our common stock are currently issued and outstanding, and how many shares will be issued
         and outstanding after this rights offering?

               As of August [ • ], 2010, we had a total of 8,703,330 shares of our common stock issued and outstanding. The number
         of shares of our common stock that will be issued and outstanding after this rights offering will depend on the number of
         shares of our common stock that are purchased in this rights offering. If we sell all of the shares of our common stock being
         offered, then we will issue 8,703,330 shares of our common stock and warrants to acquire an additional 8,703,330 shares of
         our common stock. In that case, there will be approximately 17,406,660 shares of our common stock issued and outstanding
         after this rights offering, as well as warrants issued and outstanding to acquire an additional 8,703,330 shares of our common
         stock. This would represent an increase of approximately 100% in the number of issued and outstanding shares of our
         common stock and an increase of approximately 200% in our fully-diluted common stock.


         How much money will we receive from this rights offering?

               If we sell all of the Units being offered, we will receive gross proceeds (before expenses) of approximately
         $[ • ] million. We are offering the Units in this rights offering with no minimum purchase requirement. As a result, we may
         not sell all or any of the Units being offered.


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         What are the United States federal income tax consequences to me of exercising my subscription rights?

              The receipt and exercise of your subscription rights are intended to be nontaxable events. You should seek specific tax
         advice from your personal tax advisor. See ―Material U.S. Federal Income Tax Considerations — Taxation of Stockholders.‖


         Has the board of directors made a recommendation as to whether I should exercise my subscription rights?

              No. Our board of directors has not made any recommendation as to whether you should exercise your subscription
         rights. You should decide whether to subscribe for Units or simply take no action with respect to your subscription rights
         based upon your own assessment of your best interests. We cannot assure you that the market price for our common stock
         will be above the subscription price or that anyone purchasing shares at the subscription price will be able to sell those shares
         in the future at the same price or a higher price. We urge you to make your decision based on your own assessment of our
         business and financial condition, our prospects for the future, the terms of this rights offering, and the information in, or
         incorporated by reference into, this prospectus. Please see ―Risk Factors‖ on page 11 for a discussion of some of the risks
         involved in investing in our Units.


         Who is the subscription agent for the rights offering?

               The subscription agent is Illinois Stock Transfer Co. The address for delivery to the subscription agent is as follows:


         What if I have other questions?

              If you have any questions or need further information about this offering, please contact Morrow & Company, LLC, our
         information agent for this offering, at (203) 658-9400 (for brokerage firms and banks) or toll-free at (800) 607-0088 (for
         shareholders).

               In addition, McClendon, Morrison & Partners, Inc. will act as dealer-manager for this offering. Pursuant to the
         engagement letter and the dealer-manager agreement with McClendon, Morrison & Partners, Inc., we are obligated to pay to
         McClendon, Morrison & Partners, Inc., as compensation, an advisory fee for the previously performed advisory services
         enumerated above, equal to 2% of the gross proceeds from the exercise of rights in this rights offering, subject to certain
         exceptions (including with respect to any proceeds from rights exercised by R. Dean Phillips or his related entities or
         affiliates), upon completion of this rights offering, and up to $75,000 in expenses. We are also obligated to pay any
         broker-dealer where the holder exercising such rights indicates in writing that such broker-dealer has solicited such exercise,
         a cash commission of up to 3% of the gross proceeds from the exercise of such right by the rights holder. We have also
         agreed to indemnify the dealer-manager for, or contribute to losses arising out of, certain liabilities, including liabilities
         under the Securities Act of 1933. Pursuant to the dealer-manager agreement we will enter into with McClendon, Morrison &
         Partners, Inc., McClendon, Morrison & Partners, Inc. will not be subject to any liability to us in rendering the services
         contemplated by the dealer-manager agreement except for any act of bad faith or gross negligence of McClendon,
         Morrison & Partners, Inc.


                                                                         ix
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                                                             PROSPECTUS SUMMARY

                  This summary highlights information contained elsewhere in this prospectus or incorporated by reference in this
             prospectus. This summary does not contain all of the information that you should consider before making an investment
             decision. Before making an investment decision, you should read carefully this entire prospectus, including the matters
             discussed in “Risk Factors” beginning on page 11 in this prospectus, our Annual Report on Form 10-K for the fiscal year
             ended December 31, 2009, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010 and June 30,
             2010, as such risk factors may be amended, updated or modified periodically in our reports filed with the SEC, and the
             financial data and related notes and the reports incorporated by reference in this prospectus.


             Mercantile Bancorp, Inc.

                   We are a multi-state bank holding company, headquartered in Quincy, Illinois. We were incorporated on April 15, 1983
             for the purpose of enabling Mercantile Bank (formerly known as Mercantile Trust & Savings Bank), an Illinois banking
             corporation, to operate within a bank holding company structure. Several of our subsidiary banks serve rural communities,
             and a significant portion of our business is related directly or indirectly to the agricultural industry. However, we have
             diversified in recent years by expanding into metropolitan areas.

                  As of June 30, 2010, we had total assets of approximately $1.0 billion and total deposits of approximately $868 million,
             and as of December 31, 2009, we had total assets of approximately $1.4 billion and total deposits of approximately
             $955 million. Mercantile Bank has represented on average approximately 75% of our revenue from continuing operations
             and 48% of our pre-consolidated assets annually. Most of our loans are related to real estate with, on average, approximately
             70% being farmland, construction, commercial and mortgage loans.

                  Through our subsidiaries, we conduct a full-service consumer and commercial banking business, which includes mainly
             deposit gathering, safekeeping and distribution; lending for commercial, financial and agricultural purposes, real estate
             purposes (including farmland, construction and mortgages), and consumer purposes; and asset management including trust,
             estate and agency management, retail brokerage services, and agricultural business management. Notwithstanding the broad
             range of services and products, approximately 76% of our revenue is derived on average annually from our subsidiaries’
             lending activities. The other principal revenue sources are interest and dividends on investment securities with
             approximately 9% of revenue on average, service charges and fees on customer accounts with approximately 4% of revenue
             on average, and all asset management services combined with approximately 6% of revenue on average.

                   Our principal, direct activities consist of owning and supervising our subsidiary banks, through which we derive most
             of its revenues. We direct the policies and coordinate the financial resources of the banks. We provide and perform various
             technical and advisory services for the banks, coordinate the banks’ general policies and activities, and participate in the
             banks’ major decisions.


                Wholly Owned Subsidiaries

                    As of June 30, 2010, we were the sole shareholder of the following subsidiary banks:

                    • Mercantile Bank, located in Quincy, Illinois; and

                    • Royal Palm Bancorp, Inc., which we refer to as Royal Palm, and which is the sole shareholder of The Royal Palm
                      Bank of Florida, which we refer to as Royal Palm Bank, located in Naples, Florida

                   On February 26, 2010, we consummated the sale of two other subsidiary banks of which we had been the sole
             shareholder: Marine Bank & Trust, located in Carthage, Illinois, and Brown County State Bank, located in Mt. Sterling,
             Illinois.


                Majority-Owned Subsidiaries

                  As of June 30, 2010, we were the majority, but not sole, shareholder of Mid-America Bancorp, Inc., which we refer to
             as Mid-America, which is the sole shareholder of Heartland Bank, located in Leawood, Kansas. We own 55.5%
             (84,600 shares) of the outstanding voting stock of Mid-America. As of June 30, 2010, we held approximately
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             $10.9 million of secured subordinated debt of Mid-America, convertible at any time into voting stock of Mid-America. If we
             were to convert all of the secured subordinated debt, as of June 30, 2010, assuming all other holders of subordinated debt of
             Mid-America also fully convert their secured subordinated debt into voting stock, we would have held approximately 86.4%
             of the voting stock of Mid-America.


             Recent Developments

                  On August 16, 2010, we reported results for second quarter and six months 2010. For the quarter ended June 30, 2010,
             we reported an unaudited net loss from both continuing and discontinued operations of $4.5 million or $(0.51) per share
             compared with a net loss of $52.0 million or $(5.98) per share in second quarter 2009. Our 2009 financial statements have
             been restated to reflect discontinued operations due to the sale or exchange for debt of three of our subsidiary banks in
             December 2009 and February 2010.

                  Our second quarter 2010 results reflected a 25% decrease in our loan loss provision and a 20% increase in net interest
             income. Our provision for loan losses was $7.2 million for second quarter 2010, compared to $9.5 million in the same period
             a year ago. Our net interest income was $6.3 million in the second quarter of 2010, compared with $5.2 million in the prior
             year quarter. In second quarter 2009, we also recorded a $30.4 million goodwill impairment loss (adjusted to reflect only our
             continuing operations). Since that date, we have carried no goodwill on our balance sheet.

                  On a consecutive quarter basis, our second quarter 2010 net interest income of $6.3 million reflected an increase of
             $147 thousand over $6.1 million compared to the first quarter of 2010. This was the third consecutive quarter-over-quarter
             improvement in net interest income, reflecting both improved cost of funds management at our banks and our reduced debt.
             Total noninterest income in second quarter 2010 was $2.2 million compared with $1.9 million in first quarter 2010 and
             $2.1 million in second quarter 2009.

                   Second quarter and first half 2010 results were negatively impacted by a loan loss provision of $2.0 million to increase
             the specific reserve to 50% of the carrying value of subordinated debentures (essentially a bank-to-bank loan) held by two of
             our subsidiary banks. The issuer of the debentures is a financial institution in a weakened capital position, although it is
             current on all interest payments due on the debentures. While this institution is actively seeking a sale or merger, we deemed
             it prudent to reserve half of the $4.5 million exposure.

                  Our total assets at June 30, 2010 declined to $1.0 billion, compared with $1.4 billion at December 31, 2009, primarily
             reflecting elimination of the assets held by the two subsidiary banks sold in February 2010, as well as the reduction of loan
             portfolios at our remaining subsidiary banks. Our total loans, net of allowance for losses, from continuing operations at
             June 30, 2010 were $703.4 million versus $757.8 million at December 31, 2009 as we continued to eliminate troubled loans
             and specific lending relationships that were not able to meet stronger credit standards.

                  Our total deposits from continuing operations at June 30, 2010 decreased to $868.2 million compared with
             $954.5 million at December 31, 2009, reflecting decreased funding required for the loan portfolio that allowed for a
             reduction in higher-cost time deposits, with a focus on further developing core deposit relationships.


                First Half Results

                  In the first half of 2010, we generated $20.2 million in interest income and fees from loans, compared with
             $22.7 million in first half 2009. Our net interest margin for the first half of 2010 was 2.58% compared with 1.90% a year
             ago. Our allowance for loan losses as a percentage of total loans at June 30, 2010 was 3.11%, compared with 2.43% at
             June 30, 2009.

                   As of June 30, 2010, we held $24.7 million in other real estate owned (OREO). Approximately $20.3 million or 82%
             was in construction, land development and other land (primarily unimproved land), 10% or $2.6 million was in commercial
             real estate and 7% or approximately $1.7 million was residential real estate. Mercantile Bank had $17.8 million in OREO at
             June 30, 2010, representing a significant increase from $2.8 million held at the end of first half 2009.


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                Subsidiary Bank Operating Highlights

                  Mercantile Bank, which represents approximately 75% of our consolidated assets, continues to generate solid
             performance despite relatively flat loan demand. The bank’s served markets, including Quincy, Illinois, St. Joseph, Missouri
             and Carmel, Indiana, did not suffer dramatic economic declines that were seen in other areas of the country, but did not show
             meaningful growth in first half 2010.

                  For the six months of 2010, Mercantile Bank recorded net interest income of $11.1 million, a 9.3% increase compared
             with $10.2 million in first half 2009. A 39% reduction in interest expense contributed to a rise in net interest margin of
             3.21% compared with 2.80% for the same period in 2009.

                   Deposits grew to $623.5 million at June 30, 2010, compared with $607.2 million for the prior year. Mercantile Bank’s
             efficiency ratio improved to 64.8% in the first half of 2010 compared with 84.5% in first half 2009.

                  Heartland Bank, the wholly owned subsidiary of Mid-America Bancorp, Inc., in which we hold a 55.5% ownership,
             continued to make operational improvements in the first half of 2010. Net interest income rose to $1.3 million compared
             with $1.1 million in first half 2009, interest expense declined to $1.8 million versus $2.6 million the prior year’s first half
             and it reduced its non-interest expense to $2.3 million compared with $3.1 million in first half 2009.

                  Royal Palm Bank recorded net interest income of $1.5 million for the first six months of 2010, a slight increase over the
             same period in 2009. Loan loss provision declined significantly to $3.6 million for the six months of 2010, compared with
             $7.4 million in first half 2009.


             Recent Legislation

                  On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
             ―Dodd-Frank Act‖), into law. The Dodd-Frank Act will have a broad impact on the financial services industry, including
             significant regulatory and compliance changes such as, among other things, (1) enhanced resolution authority of troubled
             and failing banks and their holding companies; (2) increased capital and liquidity requirements; (3) increased regulatory
             examination fees; (4) changes to assessments to be paid to the FDIC for federal deposit insurance; and (5) numerous other
             provisions designed to improve supervision and oversight of, and strengthening safety and soundness for, the financial
             services sector. Additionally, the Dodd-Frank Act establishes a new framework for systemic risk oversight within the
             financial system to be distributed among new and existing federal regulatory agencies, including the Financial Stability
             Oversight Council, the Board of Governors of the Federal Reserve System (the ―Federal Reserve‖), the Office of the
             Comptroller of the Currency (the ―OCC‖), and the Federal Deposit Insurance Corporation (the ―FDIC‖).

                  The following items provide a brief description of the impact of the Dodd-Frank Act on the operations and activities,
             both currently and prospectively, of the Company and its subsidiaries.

                   Deposit Insurance. The Dodd-Frank Act makes permanent the $250,000 deposit insurance limit for insured deposits.
             Amendments to the Federal Deposit Insurance Act also revise the assessment base against which an insured depository
             institution’s deposit insurance premiums paid to the FDIC’s Deposit Insurance Fund (the ―DIF‖), will be calculated. Under
             the amendments, the assessment base will no longer be the institution’s deposit base, but rather its average consolidated total
             assets less its average equity. Additionally, the Dodd-Frank Act makes changes to the minimum designated reserve ratio of
             the DIF, increasing the minimum from 1.15%to 1.35% of the estimated amount of total insured deposits, and eliminating the
             requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. Several
             of these provisions could increase the FDIC deposit insurance premiums paid by our insured depository institution
             subsidiaries. The Dodd-Frank Act also provides that, effective one year after the date of enactment, depository institutions
             may pay interest on demand deposits.

                   Trust Preferred Securities. Under the Dodd-Frank Act, bank holding companies are prohibited from including in their
             regulatory Tier 1 capital hybrid debt and equity securities issued on or after May 19, 2010. Among the hybrid debt and
             equity securities included in this prohibition are trust preferred securities, which the Company has used in the past as a tool
             for raising additional Tier 1 capital and otherwise improving its regulatory
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             capital ratios. Although the Company is permitted to continue to include our existing trust preferred securities as Tier 1
             capital, the prohibition on the use of these securities as Tier 1 capital going forward may limit the Company’s ability to raise
             capital in the future.

                  The Consumer Financial Protection Bureau. The Dodd-Frank Act creates a new, independent Consumer Financial
             Protection Bureau (the ―Bureau‖) within the Federal Reserve. The Bureau is tasked with establishing and implementing rules
             and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer
             financial products and services. The Bureau has rulemaking authority over many of the statutes governing products and
             services offered to bank consumers. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and
             regulations that are stricter than those regulations promulgated by the Bureau and state attorneys general are permitted to
             enforce consumer protection rules adopted by the Bureau against certain state-chartered institutions. Although our bank
             subsidiaries do not currently offer many of these consumer products or services, compliance with any such new regulations
             would increase our cost of operations and, as a result, could limit our ability to expand into these products and services.

                   Increased Capital Standards and Enhanced Supervision. The federal banking agencies are required to establish
             minimum leverage and risk-based capital requirements for banks and bank holding companies. These new standards will be
             no lower than existing regulatory capital and leverage standards applicable to insured depository institutions and may, in
             fact, be higher when established by the agencies. Compliance with heightened capital standards may reduce our ability to
             generate or originate revenue-producing assets and thereby restrict revenue generation from banking and non-banking
             operations. The Dodd-Frank Act also increases regulatory oversight, supervision and examination of banks, bank holding
             companies and their respective subsidiaries by the appropriate regulatory agency. Compliance with new regulatory
             requirements and expanded examination processes could increase our cost of operations.

                  Transactions with Affiliates. The Dodd-Frank Act enhances the requirements for certain transactions with affiliates
             under Section 23A and 23B of the Federal Reserve Act, including an expansion of the definition of ―covered transactions‖
             and increasing the amount of time for which collateral requirements regarding covered transactions must be maintained.

                   Transactions with Insiders. Insider transaction limitations are expanded through the strengthening on loan restrictions
             to insiders and the expansion of the types of transactions subject to the various limits, including derivative transactions,
             repurchase agreements, reverse repurchase agreements and securities lending or borrowing transactions. Restrictions are also
             placed on certain asset sales to and from an insider to an institution, including requirements that such sales be on market
             terms and, in certain circumstances, approved by the institution’s board of directors.

                   Enhanced Lending Limits. The Dodd-Frank Act strengthens the existing limits on a depository institution’s credit
             exposure to one borrower. Federal banking law currently limits a national bank’s ability to extend credit to one person (or
             group of related persons) in an amount exceeding certain thresholds. The Dodd-Frank Act expands the scope of these
             restrictions to include credit exposure arising from derivative transactions, repurchase agreements, and securities lending and
             borrowing transactions. It also eventually will prohibit state-chartered banks (such as the Company’s banking subsidiaries)
             from engaging in derivative transactions unless the state lending limit laws take into account credit exposure to such
             transactions.

                  Corporate Governance. The Dodd-Frank Act addresses many corporate governance and executive compensation
             matters that will affect most U.S. publicly traded companies, including us. The Dodd-Frank Act (1) grants shareholders of
             U.S. publicly traded companies an advisory vote on executive compensation; (2) enhances independence requirements for
             compensation committee members; (3) requires companies listed on national securities exchanges to adopt incentive-based
             compensation clawback policies for executive officers; and (4) provides the SEC with authority to adopt proxy access rules
             that would allow shareholders of publicly traded companies to nominate candidates for election as a director and have those
             nominees included in a company’s proxy materials.

                 Many of the requirements called for in the Dodd-Frank Act will be implemented over time and most will be subject to
             implementing regulations over the course of several years. While our current assessment is that the


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             Dodd-Frank Act will not have a material effect on the Company’s operations, given the uncertainty associated with the
             manner in which the provisions of the Dodd-Frank Act will be implemented by the various regulatory agencies and through
             regulations, the full extent of the impact such requirements will have on our operations is unclear. The changes resulting
             from the Dodd-Frank Act may impact the profitability of business activities, require changes to certain of our business
             practices, impose upon us more stringent capital, liquidity and leverage requirements or otherwise adversely affect our
             business. These changes may also require us to invest significant management attention and resources to evaluate and make
             any changes necessary to comply with new statutory and regulatory requirements. Failure to comply with the new
             requirements may negatively impact our results of operations and financial condition. While we cannot predict what effect
             any presently contemplated or future changes in the laws or regulations or their interpretations would have on us, these
             changes could be materially adverse to our investors.


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                                                            THE RIGHTS OFFERING

                 For a more complete description of the terms of this offering being made by this prospectus, see “The Rights Offering”
             and “Description of Securities” in this prospectus.

             Securities Offered                           We are distributing at no cost or charge to you one subscription right for each
                                                          share of common stock that you owned as of 5:00 p.m., New York City time,
                                                          on the record date, [ • ], 2010, either as a holder of record or, in the case of
                                                          shares held of record by brokers, custodian banks or other nominees on your
                                                          behalf, as beneficial owner of the shares. These rights may be exercised only
                                                          by you, and cannot be sold, transferred or assigned to anyone else.

                                                          We will not distribute fractional subscription rights, but instead we will round
                                                          up the aggregate number of subscription rights you receive to the next whole
                                                          number.

             Basic Subscription Right                     For each subscription right that you own, you will have a basic subscription
                                                          right to buy from us one Unit at the subscription price. Each Unit consists of
                                                          one share of our common stock and a warrant to purchase one share of our
                                                          common stock. You may exercise your basic subscription right for some or all
                                                          of your basic subscription rights, or you may choose not to exercise any of
                                                          your basic subscription rights.

             Over-Subscription Right                      If you elect to exercise your basic subscription right in full, you may also
                                                          subscribe for additional Units at the same subscription price per Unit. If an
                                                          insufficient number of Units are available to fully satisfy the
                                                          over-subscription right requests, the available Units will be distributed pro
                                                          rata among rights holders who exercised their over-subscription right based
                                                          on the number of Units each rights holder subscribed for under the basic
                                                          subscription right. No subscriber can own, as a result of the exercise of its
                                                          over-subscription right, a number of shares and warrants to acquire shares
                                                          which would result in such subscriber owning, as of the consummation of this
                                                          rights offering, in excess of 9.9% of our common stock, on a fully-diluted
                                                          basis. The subscription agent will return any excess payments by mail without
                                                          interest or deduction promptly after the expiration of the rights offering.

             Subscription Price                           The subscription price per Unit shall be equal to $[ • ], which is the
                                                          approximate midpoint of a range between the price equal to 90% of the
                                                          volume weighted average price of our common stock during the 30 trading
                                                          days preceding the announcement of this rights offering and the most recent
                                                          low closing price of our common stock. You may pay the purchase price for
                                                          the Units either by wire transfer or by check, or as instructed by your
                                                          broker-dealer, bank or other nominee who is the record holder of your shares
                                                          of our common stock. Your exercise of subscription rights will not be
                                                          considered effective until your payment has cleared. In the case of
                                                          immediately available funds, such as a wire transfer, funds will be deemed to
                                                          clear upon receipt, but in the case of a check, up to five business days may be
                                                          required for clearing and the check must clear prior to the expiration of the
                                                          rights offering period.

             Minimum Subscriptions                        There is no minimum subscription amount under which we would be required
                                                          to cancel or terminate the rights offering.

             Record Date                                  [ • ], 2010.


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             Expiration Date                              The subscription rights will expire at 5:00 p.m., New York City time, on [ • ],
                                                          2010, unless the expiration date is extended. We reserve the right to extend
                                                          the subscription rights period at our sole discretion.

             Procedures for Exercising Subscription       The subscription rights may be exercised at any time during the subscription
             Rights                                       period, which commences on the date of this prospectus. To exercise your
                                                          subscription rights, you must properly complete the enclosed subscription
                                                          rights certificate and deliver it, along with the full subscription price, to the
                                                          subscription agent, Illinois Stock Transfer Co., before 5:00 p.m., New York
                                                          City time, on [ • ], 2010, unless the expiration date is extended.

                                                          If you use the mail, we recommend that you use insured, registered mail,
                                                          return receipt requested. If you cannot deliver your subscription rights
                                                          certificate to the subscription agent on time, you may follow the guaranteed
                                                          delivery procedures described below under the heading entitled ―The Rights
                                                          Offering — Guaranteed Delivery Procedures.‖

             Net Proceeds of Offering                     The net proceeds to us will depend on the number of subscription rights that
                                                          are exercised. If we issue all 8,703,330 Units available for the exercise of
                                                          subscription rights in the rights offering, the net proceeds to us, after
                                                          deducting estimated offering expenses, will be approximately $[ • ] million.
                                                          We currently intend to use the net proceeds of this rights offering for general
                                                          corporate purposes, including contribution to the capital of, and to support,
                                                          our subsidiary banks as needed. See ―Use of Proceeds.‖

             Non-Transferability of Subscription Rights   The subscription rights may not be sold, transferred or assigned to anyone
                                                          else and will not be listed for trading on the NYSE Amex or any other stock
                                                          exchange or trading market or on the OTC Bulletin Board. See ―The Rights
                                                          Offering — Non-Transferability of Subscription Rights.‖

             No Revocation of Exercise by Stockholders    All exercises of subscription rights are irrevocable, even if you later learn
                                                          information about us that you consider unfavorable. You should not exercise
                                                          your subscription rights unless you are certain that you wish to purchase the
                                                          Units offered pursuant to the rights offering. See ―The Rights Offering — No
                                                          Revocation of Exercised Subscription Rights.‖

             Conditions to the Rights Offering            The completion of the rights offering is subject to the conditions described in
                                                          the section below entitled ―The Rights Offering — Cancellation and
                                                          Amendment of Rights Offering.‖

             Amendment; Cancellation                      We may amend the terms of the rights offering or extend the rights offering
                                                          period. If the rights offering is cancelled, all subscription payments received
                                                          by the subscription agent or by us will be returned, without interest or penalty,
                                                          as soon as practicable to those persons who subscribed for shares in the rights
                                                          offering.

             No Board Recommendation                      Our board of directors is making no recommendations regarding your exercise
                                                          of the subscription rights. You are urged to make your own decision whether
                                                          or not to exercise your subscription rights based on your own assessment of
                                                          our business and the rights offering. See ―Risk Factors‖ beginning on page 11.


                                                                       7
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             Issuance of Shares of Common Stock and      If you purchase Units through the rights offering, we will issue the shares of
             Warrants Comprising Units                   common stock and warrants comprising those Units to you as soon as
                                                         practicable after the completion of the rights offering or, if we accept
                                                         subscriptions relating to basic subscription rights sooner, as soon as
                                                         practicable after any such acceptance.

             Listing of Common Stock                     Neither the subscription rights nor the warrants will be listed on the NYSE
                                                         Amex or any other stock exchange or trading market or on the OTC
                                                         Bulletin Board. Our common stock trades on the NYSE Amex under the
                                                         symbol ―MBR,‖ and the shares to be issued in connection with the rights
                                                         offering, as well as those underlying the warrants, will also be listed on the
                                                         NYSE Amex under the same symbol.

             Certain Material U.S. Federal Income Tax    The receipt and exercise of your subscription rights will generally not be
             Considerations                              taxable under U.S. federal income tax laws. However, you should seek
                                                         specific tax advice from your tax advisor in light of your tax situation and as
                                                         to the applicability and effect of any other tax laws. See ―Material U.S.
                                                         Federal Income Tax Considerations.‖

             Subscription Agent                          Illinois Stock Transfer Co.

             Shares of Common Stock Outstanding          As of August [ • ], 2010, 8,703,330 shares of our common stock were
             Before the Rights Offering                  outstanding.

             Shares of Common Stock Outstanding After We will issue up to 8,703,330 shares of our common stock in the rights
             Completion of the Rights Offering        offering, depending on the number of subscription rights that are exercised.
                                                      Assuming there are no changes in the number of outstanding shares of our
                                                      common stock prior to the expiration of the rights offering period, and based
                                                      on the number of shares of our common stock outstanding as of August [ • ],
                                                      2010, if we issue all 8,703,330 shares of our common stock available for the
                                                      exercise of subscription rights in the rights offering, we would have
                                                      17,406,660 shares of our common stock outstanding following the completion
                                                      of the rights offering.

                                                         In addition, we will issue warrants to purchase up to 8,703,330 shares of our
                                                         common stock in the rights offering, depending on the number of subscription
                                                         rights that are exercised.

             Risk Factors                                Stockholders considering making an investment by exercising subscription
                                                         rights in the rights offering should carefully read and consider the information
                                                         set forth in the section entitled ―Risk Factors‖ beginning on page 11 of this
                                                         prospectus, together with the other information contained in or incorporated
                                                         by reference into this prospectus supplement and the accompanying
                                                         prospectus, including the information contained under the heading ―Risk
                                                         Factors‖ in our Annual Report on Form 10-K for our fiscal year ended
                                                         December 31, 2009, filed with the SEC and any updates of those Risk Factors
                                                         contained in our Quarterly Reports on Form 10-Q, before making a decision
                                                         to invest in Units.

             Fees and Expenses                           We will pay the fees and expenses related to this rights offering.


                                                                     8
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                               SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

                   The following table presents our selected consolidated financial data for the six months ended June 30, 2010 and each
             of the five years in the period ended December 31, 2009. We derived our balance sheet and income statement data for the
             years ended December 31, 2009, 2008, 2007, 2006 and 2005, from our audited consolidated financial statements. We
             derived our balance sheet and income statement data for the six-month period ended June 30, 2010 from our unaudited
             condensed consolidated financial statements, which include all adjustments, consisting only of normal, recurring adjustments
             that our management considers necessary for the fair presentation of our financial condition and results of operations for that
             period. The data has been revised to separately state income (loss) from discontinued operations for each period represented.
             Operating results for the period ended June 30, 2010 are not necessarily indicative of results that may be expected for the
             entire year ended December 31, 2010. See ―Risk Factors‖ beginning on page 11 and the notes to our consolidated financial
             statements. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by,
             our consolidated financial statements and the accompanying notes and the other information included elsewhere, or
             incorporated by reference, in this prospectus.


                                            Six Months
                                           Ended June 30,                                   Year Ended December 31,
                                               2010               2009                 2008               2007                2006            2005
                                                                         (Dollars in thousands, except per share data)


             BALANCE SHEET
              ITEMS
              Securities                   $    124,443      $    130,484       $     194,097      $     205,757         $     188,579   $    165,066
              Loans held for sale                 2,199               681               4,366              3,338                 1,660          3,635
              Loans                             723,812           775,989           1,339,374          1,212,051             1,031,656        857,648
              Allowance for loan
                 losses                          22,608            18,851              23,467              12,794              10,613           8,082
              Discontinued
                 operations, assets
                 held for sale                      N/A            285,992               N/A                N/A                   N/A             N/A
              Total assets                     1,008,792         1,390,482          1,774,983          1,639,145             1,422,827       1,137,824
              Total deposits                     868,173           954,524          1,462,276          1,319,459             1,166,814         946,129
              Short-term borrowings               13,823            30,740             49,227             45,589                26,338          32,587
              Long-term debt                      76,858            87,030            146,519            143,358               107,249          51,720
              Discontinued
                 operations, liabilities
                 held for sale                     N/A            264,044                 N/A                N/A                 N/A             N/A
              Noncontrolling interest             1,790             3,901                5,735              9,446               9,198           7,561
              Stockholders’ equity,
                 net of noncontrolling
                 interest                        38,005            41,302              98,957            108,282              100,658          91,488
             RESULTS OF
              OPERATIONS
              Interest and dividend
                 income                    $     22,775      $     50,317       $      58,906      $       67,075        $     52,291    $     38,722
              Interest expense                   10,354            29,101              37,152              40,489              28,470          17,314
              Net interest income                12,421            21,216              21,754              26,586              23,821          21,408
              Provision for loan
                 losses                          11,140            22,083              23,176               2,724               3,401           1,828
              Noninterest income                  4,125             7,791               9,157              10,445              11,196           6,195
              Noninterest expense                17,255            71,483              38,574              27,766              21,620          18,450
              Income tax expense
                 (benefit)                        (3,037 )         (12,137 )           (11,371 )              952               3,062           1,578
              Income (loss) from
                 continuing operations            (8,812 )         (52,422 )           (19,468 )            5,589               6,934           5,747
              Income (loss) from
                 discontinued
                 operations                        3,210            (7,958 )             7,326              5,034               4,177           4,405
              Noncontrolling interest             (2,111 )          (1,833 )            (3,321 )              622                 792             648
              Net income (loss)                   (3,491 )         (58,547 )            (8,821 )           10,001              10,319           9,504
9
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                                                   Six Months
                                                  Ended June 30,                            Year Ended December 31,
                                                      2010             2009               2008              2007            2006          2005
                                                                        (Dollars in thousands, except per share data)


             CAPITAL RATIOS
               Total capital to risk-weighted
                 assets                                12.39 %         10.62 %             9.25 %          10.49 %          10.92 %       11.75 %
               Tier 1 capital to risk-weighted
                 assets                                 6.19             5.31              6.10             7.86             9.70         10.88
               Tier 1 capital to average assets         4.64             3.31              5.08             6.72             8.09          9.00
             PER SHARE DATA
               Basic earnings (loss) per share
                 — continuing operations(1)        $    (0.77 )    $    (5.81 )      $    (1.85 )      $    0.57        $    0.72     $    0.61
               Basic earnings (loss) per share
                 — discontinued operations(1)           0.37            (0.91 )           (0.84 )           0.58             0.46          0.47
               Cash dividends                           N/A              N/A               0.24             0.24             0.21          0.20
               Book value                               4.37             4.75             11.37            12.43            11.50         10.35
             OTHER INFORMATION
               Return on average assets(2)              (0.62 )%        (4.43 )%          (1.46 )%          0.48 %           0.76 %        0.77 %
               Return on average equity(2)             (16.84 )        (68.42 )          (15.38 )           4.77             6.59          5.95
               Dividend payout ratio                     N/A             N/A             (23.68 )          20.87            17.80         18.52
               Net interest margin(2)                    2.58            2.01              2.20             2.86             3.38          3.55
               Average stockholders’ equity to
                 average assets                         3.67             4.27              6.19             7.08             7.87          8.33
               Allowance for loan losses as a
                 percentage of total loans              3.11             2.43              1.75             1.06             1.03          0.94
               Full service offices                       12               17                26               27               22            18



              (1) In December 2007, our board of directors approved a three-for-two stock split. Share and per share data in the selected
                  consolidated financial information have been retroactively restated for the stock split as if it occurred on January 1,
                  2005.

              (2) Information reflected is from continuing operations.

                                                                         10
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                                                                RISK FACTORS

              An investment in our Units, or any of the securities comprising the Units, involves a high degree of risk. You should
         carefully consider the following risk factors, along with the other information contained or incorporated in this prospectus,
         including our consolidated financial statements and the notes thereto, before making an investment in our Units. These
         various risks and uncertainties, some of which are difficult to predict and beyond our control, could negatively impact us.
         Adverse experience with the risks described below could have a material impact on our financial condition and results of
         operations, as well as the value of our common stock. In such an event, the price of our common stock could decline, and
         you may lose part or all of your investment.

              This prospectus, including the matters addressed under the caption “Cautionary Statement Re: Forward-Looking
         Information,” contains forward-looking statements that involve risks and uncertainties, including statements about our
         future plans, objectives, intentions and expectations. Past results are not a reliable indicator of future results, and historical
         trends should not be used to anticipate results or trends in future periods. Many factors, including those described below,
         could cause actual results to differ materially from those discussed in forward-looking statements.


         Risks Related to Our Company

            We and our banking subsidiaries are subject to regulatory agreements and orders that restrict us and our subsidiaries
            from taking certain actions.

              General. As is more fully discussed in the ―Regulatory Matters‖ section in Part II, Item 7 of our Annual Report on
         Form 10-K for the year ended December 31, 2009, and Part I, Item 2 of our Quarterly Reports on Form 10-Q for the quarters
         ended March 31, 2010 and June 30, 2010, we, Mercantile Bank, Royal Palm, Royal Palm Bank, Mid-America and Heartland
         Bank are subject to various bank regulatory enforcement actions. As of June 30, 2010, we and each subsidiary have met all
         regulatory requirements, with the exception of Heartland Bank’s Tier 1 leverage ratio of 7.23%, that was below its required
         minimum ratio of 8.00%. Heartland Bank is developing a plan to restore its Tier 1 leverage ratio to the required level, and
         along with each of the other subsidiaries, continues to work diligently to maintain compliance with the enforcement actions.
         If we are unable to comply with such requirements, the regulatory agencies could force a sale, liquidation or federal
         conservatorship or receivership of our subsidiaries.

               The Company. We executed a Written Agreement (―WA‖) with the Federal Reserve Bank (―FRB‖) in February 2010.
         Under the terms of the WA, we must, among other requirements, provide our subsidiary banks with financial and managerial
         resources as needed, update our capital and cash flow plans for the FRB, and provide periodic performance updates to the
         FRB. In addition, we are prohibited from paying any special salaries or bonuses to insiders, paying dividends, paying interest
         related to trust preferred securities, or incur any additional debt, without the prior written approval of the FRB.

              On May 19, 2010, we submitted to the FRB, and the FRB accepted, a revised three-year strategic and capital plan that
         outlines the proposed strategies to maintain our regulatory capital status of at least ―adequately capitalized‖, maintain
         positive cash balances at the parent company level, ensure that each of our subsidiaries meets the capital requirements
         directed by their respective regulatory orders, and meet our debt service requirements, including distributions on our trust
         preferred securities.

              Banking Subsidiaries. Generally, the enforcement actions pertaining to our subsidiaries require the banking
         subsidiaries provide certain information to each supervisory authority including, but not limited to, financial performance
         updates, loan performance updates, written plan for reducing classified assets and concentrations of credit, written plan to
         improve liquidity and reduce dependency on volatile liabilities, written capital plan, and written reports of progress. In
         addition, there are restrictions on the subsidiaries’ ability to declare any dividends or make any distributions of capital
         without the prior approval of the supervisory authorities and, with respect to the bank subsidiaries, to maintain certain Tier 1
         leverage capital and total risk based capital ratios at prescribed levels.

              As of June 30, 2010, Mercantile Bank, Royal Palm, Royal Palm Bank, Mid-America and Heartland Bank were in
         compliance with substantially all of the requirements of the enforcement actions pertaining to them. Specifically, with
         respect to capital ratios, as of June 30, 2010, Mercantile Bank had a Tier 1 leverage capital ratio of 8.60% and a


                                                                         11
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         total risk based capital ratio of 12.57%. As of June 30, 2010, Royal Palm Bank had a Tier 1 leverage capital ratio of 8.03%,
         Tier 1 risk based capital ratio of 12.39% and a total risk based capital ratio of 13.75%, and Heartland Bank had a Tier 1
         leverage capital ratio of 7.23%, below its required minimum ratio of 8.00%, and total risk based capital ratio of 12.23%.

              Capital Injections and Ongoing Compliance. Our and our subsidiaries’ ability to remain in compliance with the
         enforcement actions depends on various factors, including, but not limited to, the maintenance of adequate capital levels. A
         significant part of the plan presented to the FRB was the our initiative to sell one or more subsidiary banks in order to
         generate liquidity to reduce debt, improve capital ratios and provide necessary capital contributions to our remaining
         subsidiary banks. The result of this initiative was the exchange for debt of HNB National Bank in December 2009 and the
         sale of Marine Bank & Trust and Brown County State Bank in February 2010. The next step in raising capital is to
         successfully consummate this rights offering. If we are not successful in raising additional capital through this rights
         offering, our ability to remain compliant with the enhanced capital levels required under the enforcement actions will be
         reduced. We could be compelled by banking regulators under those circumstances to sell, liquidate or place in federal
         conservatorship or receivership one or more of our remaining subsidiaries. Also, while these enforcement actions remain in
         place, our ability to address opportunities and challenges in our business, our markets and the banking industry generally
         will be curtailed.


            Non-performing assets take significant time to resolve and adversely affect our results of operations and financial
            condition, and could result in further losses in the future.

               At June 30, 2010 and December 31, 2009, our non-performing loans (which consist of non-accrual loans and loans past
         due 90 days or more and still accruing loans) totaled $38.4 million and $50.8 million, or 5.29% and 6.54% of our loan
         portfolio, respectively. At June 30, 2010 and December 31, 2009, total non-performing assets (which include
         non-performing loans plus other real estate owned) were $63.1 million and $67.2 million, or 8.70% and 8.66% of total loans,
         respectively. Non-performing assets adversely affect net income in various ways. While we pay interest expense to fund
         non-performing assets, no interest income is recorded on non-accrual loans or other real estate owned, thereby adversely
         affecting income and returns on assets and equity, and loan administration costs increase and the efficiency ratio is adversely
         affected. When we take collateral in foreclosures and similar proceedings, we are required to mark the collateral to its
         then-fair market value, which, when compared to the value of the loan, may result in a loss. These non-performing loans and
         other real estate owned also increase our risk profile and the capital that regulators believe is appropriate in light of such
         risks. The resolution of non-performing assets requires significant time commitments from management, which can be
         detrimental to the performance of their other responsibilities. We may experience further increases in non-performing loans
         in the future, and non-performing assets may result in further losses in the future, either of which could have a material
         adverse effect on our results of operations.


            We incurred net losses for the six months ended June 30, 2010, as well as in 2009 and 2008 and we may incur further
            losses.

              We incurred a net loss of $3.5 million, $58.5 million and $8.8 million for the six months ended June 30, 2010, and for
         the years ended December 31, 2009 and 2008, respectively, due to high levels of provision for loan losses and goodwill
         impairment. We may incur future losses, especially in light of economic conditions that continue to adversely affect our
         borrowers, particularly those in the southwest Florida market.


            If the value of real estate in our market area were to decline materially, a significant portion of the loan portfolio could
            become under-collateralized, which might have a material adverse affect on our financial condition and results of
            operations.

               In addition to considering the financial strength and cash flow characteristics of borrowers, we often secure loans with
         real estate collateral, which provides an alternate source of repayment in the event of default by the borrower. This real
         property may deteriorate in value during the time the credit is extended, and if it is necessary to liquidate the collateral
         securing a loan to satisfy the debt during a period of reduced real estate values, earnings and capital could be adversely
         affected.


                                                                       12
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            Real estate construction, land acquisition and development loans are based upon estimates of costs and values
            associated with the complete project. These estimates may be inaccurate, and we may be exposed to significant losses
            on loans for these projects.

              Construction, land acquisition, and development loans involve additional risks because funds are advanced upon the
         security of the project, which is of uncertain value prior to its completion, and costs may exceed realizable values in
         declining real estate markets. Because of the uncertainties inherent in estimating construction costs and the realizable market
         value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate
         accurately the total funds required to complete a project and the related loan-to-value ratio. As a result, construction loans
         often involve the disbursement of substantial funds with repayment dependent, in part, on the success of the ultimate project
         and the ability of the borrower to sell or lease the property, rather than the ability of the borrower or guarantor to repay
         principal and interest. If appraisal of the value of the completed project proves to be overstated or market values or rental
         rates decline, we may have inadequate security for the repayment of the loan upon completion of construction of the project.
         If we are forced to foreclose on a project prior to or at completion due to a default, we may not be able to recover all of the
         unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs. In addition, we may be
         required to fund additional amounts to complete the project and may have to hold the property for an unspecified period of
         time while attempting to dispose of it.


            If economic conditions worsen, we may suffer from credit risk and our allowance for loan losses may not be adequate
            to cover actual losses.

               Credit risk is the risk that loan customers or other counter-parties will be unable to perform their contractual obligations
         resulting in a negative impact on earnings. Like all financial institutions, we maintain an allowance for loan losses to provide
         for loan defaults and non-performance. The allowance for loan losses is based on historical loss experience as well as an
         evaluation of the risks associated with the loan portfolio, including the size and composition of the portfolio, current
         economic conditions and geographic concentrations within the portfolio. If the economy in our primary geographic market
         areas should worsen, this may have an adverse impact on the loan portfolio. If for any reason the quality of the portfolio
         should weaken, the allowance for loan losses may not be adequate to cover actual loan losses, and future provisions for loan
         losses could materially and adversely affect financial results.


            Recent, ongoing unfavorable economic conditions may continue or worsen.

               Unfavorable conditions that have affected the economy and financial markets since mid-2007, further intensified in
         2008 and 2009, as did a global economic slowdown, resulting in an overall decrease in the confidence in the markets and
         with negative effects on the business, financial condition and results of operations of financial institutions in the United
         States and other countries. Our business activities and earnings are affected by these general business conditions. Dramatic
         declines in the housing market over the past two years, with falling home prices and increasing foreclosures and
         unemployment, have negatively impacted the credit performance of real estate related loans and resulted in significant
         write-downs of asset values by financial institutions. These write-downs have caused many financial institutions to seek
         additional capital, to reduce or eliminate dividends, to merge with larger and stronger institutions and, in some cases, to fail.
         Reflecting concern about the stability of the financial markets generally and the strength of counterparties, many lenders and
         institutional investors have reduced or ceased providing funding to borrowers, including to other financial institutions. This
         market turmoil and tightening of credit have led to an increased level of commercial and consumer delinquencies, lack of
         consumer confidence, increased market volatility and widespread reduction of business activity generally. Market
         developments may further erode consumer confidence levels and may cause adverse changes in payment patterns, causing
         increases in delinquencies and default rates, which may impact our charge-offs and provision for loan losses. Continuing
         economic deterioration that affects household and/or corporate incomes could also result in reduced demand for loan or
         fee-based products and services. In addition, changes in securities market conditions and monetary fluctuations could
         adversely affect the availability and terms of funding necessary to meet our liquidity needs. A worsening of these conditions
         would likely exacerbate the adverse effects of these difficult market conditions on us and others in the financial institution
         industry.


                                                                        13
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            Current levels of market volatility are unprecedented.

              The market for certain investment securities has become highly volatile or inactive, and may not stabilize or resume in
         the near term. This volatility has resulted in significant fluctuations in the prices of those securities, and additional market
         volatility may continue to adversely affect our results of operations.


            The recently enacted legislation may not stabilize the U.S. financial markets.

               The Emergency Economic Stabilization Act of 2008, or EESA, was signed into law in October 2008 for the purpose of
         stabilizing and providing liquidity to the U.S. financial markets. Shortly thereafter, the U.S. Department of the Treasury
         announced a program under the EESA, known as the Capital Purchase Program, pursuant to which it would make senior
         preferred stock investments in participating financial institutions. In February 2009, the American Recovery and
         Reinvestment Act of 2009, or the Recovery Act, was passed, which is intended to stabilize the financial markets and slow or
         reverse the downturn in the U.S. economy, and which revised certain provisions of the EESA. The FDIC has also
         commenced a guarantee program under which the FDIC would offer a guarantee of certain financial institution indebtedness
         in exchange for an insurance premium to be paid to the FDIC by issuing financial institutions. EESA and its implementing
         regulations, the Recovery Act, the FDIC programs, or any other governmental program may not have a positive impact on
         the financial markets. The failure of the EESA, the Recovery Act, the FDIC programs, or any other actions of the
         U.S. government to stabilize the financial markets and a continuation or worsening of current financial market conditions
         could materially and adversely affect our business, financial condition, results of operations, access to credit or the trading
         price of our common stock.


            We may be adversely affected by recently enacted or contemplated legislation and rulemaking.

               The programs established or to be established under the EESA and Troubled Asset Relief Program, as well as
         restrictions contained in current or future rules implementing or related to them and those contemplated by the Recovery
         Act, may adversely affect us if we elect to participate in these programs in the future. In specific, any governmental or
         regulatory action having the effect of requiring us to obtain additional capital, whether from governmental or private sources,
         could have a material dilutive effect on current shareholders. We would face increased regulation of our business and
         increased costs associated with these programs. The EESA, as amended by the Recovery Act, contains, among other things,
         significant restrictions on the payment of executive compensation, which may have an adverse effect on the retention or
         recruitment of key members of senior management. Also, our participation in the Capital Purchase Program would limit
         (without the consent of the Department of Treasury) our ability to increase our dividend and to repurchase our common
         stock for up to three years. Similarly, programs established by the FDIC may have an adverse effect on us, due to the costs
         of participation.


            Recently enacted legislative reforms and future regulatory reforms required by such legislation could have a
            significant impact on our business, financial condition and results of operations.

              On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
         ―Dodd-Frank Act‖) into law. The Dodd-Frank Act will have a broad impact on the financial services industry, including
         significant regulatory and compliance changes. Many of the requirements called for in the Dodd-Frank Act will be
         implemented over time and most will be subject to implementing regulations over the course of several years. Given the
         uncertainty associated with the manner in which the provisions of the Dodd-Frank Act will be implemented by the various
         regulatory agencies and through regulations, the full extent of the impact such requirements will have on our operations is
         unclear. The changes resulting from the Dodd-Frank Act may impact the profitability of our business activities, require
         changes to certain of our business practices, impose upon us more stringent capital, liquidity and leverage requirements or
         otherwise adversely affect our business. In particular, the potential impact of the Dodd-Frank Act on our operations and
         activities, both currently and prospectively, include, among others:

               • a reduction in our ability to generate or originate revenue-producing assets as a result of compliance with heightened
                 capital standards;

               • increased cost of operations due to greater regulatory oversight, supervision and examination of banks and bank
                 holding companies, and higher deposit insurance premiums;
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               • the limitation on our ability to raise capital through the use of trust preferred securities as these securities may no
                 longer be included as Tier 1 capital going forward; and

               • the limitation on our ability to expand consumer product and service offerings due to anticipated stricter consumer
                 protection laws and regulations.

              Further, we may be required to invest significant management attention and resources to evaluate and make any
         changes necessary to comply with new statutory and regulatory requirements under the Dodd-Frank Act. Failure to comply
         with the new requirements may negatively impact our results of operations and financial condition. While we cannot predict
         what effect any presently contemplated or future changes in the laws or regulations or their interpretations would have on us,
         these changes could be materially adverse to our investors.


            We may be adversely affected by government regulation.

              All banks are subject to extensive federal and state banking regulations and supervision. Banking regulations are
         intended primarily to protect depositors’ funds and the federal deposit insurance funds, not the shareholders. Regulatory
         requirements affect lending practices, capital structure, investment practices, dividend policy and growth. Failure to meet
         minimum capital requirements could result in the imposition of limitations that would adversely impact operations and
         could, if capital levels dropped significantly, result in being required to cease operations. Changes in governing law,
         regulations or regulatory practices could impose additional costs on us or adversely affect the ability to obtain deposits or
         make loans and thereby hurt revenues and profitability.


            We are subject to the local economies where we operate, and unfavorable economic or market conditions in these areas
            could have a material adverse effect on our financial condition and results of operations.

              Our success depends upon the general business and economic conditions in the United States and in its primary areas of
         operation. Economic conditions in the local market areas, including the agricultural prices for land and crops and
         commercial and residential real estate values, may have an adverse effect on the quality of our loan portfolio and financial
         performance. An economic downturn within our footprint could negatively impact household and corporate incomes. This
         impact may lead to decreased demand for loan and deposit products and increase the number of customers who fail to pay
         interest or principal on their loans.


            We may not be able to influence the activities of the banking organizations in which we own a minority interest.

             We own a minority interest in several banking organizations throughout the United States. As minority shareholders,
         we may be unable to influence the activities of these organizations, and may suffer losses due to these activities.


            Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition.

              FDIC insurance premiums increased substantially in 2009, and we expect to pay significantly higher FDIC premiums in
         the future. Bank failures have significantly depleted the FDIC’s Deposit Insurance Fund and reduced the Deposit Insurance
         Fund’s ratio of reserves to insured deposits. The FDIC adopted a revised risk-based deposit insurance assessment schedule
         on February 27, 2009, which raised deposit insurance premiums. On May 22, 2009, the FDIC also implemented a special
         assessment equal to five basis points of each insured depository institution’s assets minus Tier 1 capital as of June 30, 2009,
         but no more than 10 basis points times the institution’s assessment base for the second quarter of 2009, which was paid on
         September 30, 2009. Additional special assessments may be imposed by the FDIC for future periods. We participate in the
         FDIC’s Temporary Liquidity Guarantee Program, or TLGP, for noninterest-bearing transaction deposit accounts. Banks that
         participate in the TLGP’s noninterest-bearing transaction account guarantee will pay the FDIC an annual assessment of
         10 basis points on the amounts in such accounts above the amounts covered by FDIC deposit insurance. To the extent that
         these TLGP assessments are insufficient to cover any loss or expenses arising from the TLGP program, the FDIC is
         authorized to impose an emergency special assessment on all FDIC-insured depository institutions. The FDIC has authority
         to impose charges for the TLGP upon depository institution holding companies, as well. The TLGP was scheduled to end
         December 31, 2009, but the FDIC extended it to June 30, 2010 at an increased charge of 15 to 25 basis points,
15
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         depending on the depository institution’s risk assessment category rating assigned with respect to regular FDIC assessments
         if the institution elects to remain in the TLGP. These changes have caused the premiums and TLGP assessments charged by
         the FDIC to increase. The Dodd-Frank Act makes permanent the $250,000 deposit insurance limit for insured deposits.
         Amendments to the Federal Deposit Insurance Act also revise the assessment base against which an insured depository
         institution’s deposit insurance premiums paid to the FDIC’s Deposit Insurance Fund (the ―DIF‖), will be calculated. Under
         the amendments, the assessment base will no longer be the institution’s deposit base, but rather its average consolidated total
         assets less its average equity. Additionally, the Dodd-Frank Act makes changes to the minimum designated reserve ratio of
         the DIF, increasing the minimum from 1.15%to 1.35% of the estimated amount of total insured deposits, and eliminating the
         requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds. Several
         of these provisions could increase the FDIC deposit insurance premiums paid by our insured depository institution
         subsidiaries. The Dodd-Frank Act also provides that, effective one year after the date of enactment, depository institutions
         may pay interest on demand deposits. These actions are expected to increase our costs for the foreseeable future.


            We may continue to suffer increased losses in our loan portfolio and in foreclosed assets held for sale despite our
            underwriting practices.

              We seek to mitigate the risks inherent in our loan portfolio by adhering to specific underwriting practices. These
         practices often include: analysis of a borrower’s credit history, financial statements, tax returns and cash flow projections;
         valuation of collateral based on reports of independent appraisers; and verification of liquid assets. Although we believe that
         our underwriting criteria are, and historically have been, appropriate for the various kinds of loans it makes, we have already
         incurred higher than expected levels of losses on loans that have met these criteria, and may continue to experience higher
         than expected losses depending on economic factors and consumer behavior.


            Declines in the value of securities held in our investment portfolio may negatively affect earnings.

               The value of an investment in our portfolio could decrease due to changes in market factors. The market value of
         certain investment securities is volatile and future declines or other-than-temporary impairments could materially adversely
         affect future earnings and regulatory capital. Continued volatility in the market value of certain investment securities,
         whether caused by changes in market perceptions of credit risk, as reflected in the expected market yield of the security, or
         actual defaults in the portfolio could result in significant fluctuations in the value of the securities. This could have a material
         adverse impact on our accumulated other comprehensive income and stockholders’ equity depending upon the direction of
         the fluctuations.

              Furthermore, future downgrades or defaults in these securities could result in future classifications as
         other-than-temporarily impaired. We have invested in common stock of other financial institutions and the Federal Home
         Loan Bank of Chicago. Deterioration of the financial stability of the underlying financial institutions for these investments
         could result in other-than-temporary impairment charges to us and could have a material impact on future earnings.


            The soundness of other financial institutions could adversely affect us.

              Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial
         soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing,
         counterparty or other relationships. We have exposure to many different counterparties, and we routinely execute
         transactions with counterparties in the financial industry. As a result, defaults by, or even rumors or questions about, one or
         more financial services institutions, or the financial services industry generally, have led to market-wide liquidity problems
         and could lead to losses or defaults by us or by other institutions. Many of these transactions expose us to credit risk in the
         event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us
         cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the financial instrument
         exposure due us. Any such losses could materially and adversely affect our results of operations.


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            We have a significant deferred tax asset and cannot assure it will be fully realized.

              We had net deferred tax assets of $10.2 million as of December 31, 2009, and believe that it is more likely than not that
         these assets will be realized. In evaluating the need for a valuation allowance, management estimated future taxable income
         based on forecasts and tax planning strategies that may be available to us. This process required significant judgment by
         management about matters that are by nature uncertain. If future events differ significantly from the current forecasts, we
         may need to establish additional valuation allowances, which could have a material adverse effect on our results of
         operations and financial condition.

            Our stock price can be volatile.

              Our stock price can fluctuate widely in response to a variety of factors, including: actual or anticipated variations in
         quarterly operating results; recommendations by securities analysts; significant acquisitions or business combinations;
         operating and stock price performance of other companies that investors deem comparable; new technology used or services
         offered by competitors; news reports relating to trends, concerns and other issues in the financial services industry, and
         changes in government regulations. Many of these factors that may adversely affect our stock price do not directly pertain to
         our operating results, including general market fluctuations, industry factors and economic and political conditions and
         events, including terrorist attacks, economic slowdowns or recessions, interest rate changes, credit loss trends or currency
         fluctuations.

            Even if we successfully raise funds through this rights offering, we may not be able to implement successfully our
            capital plan.

              We have developed and are continuing to develop and implement a capital raising plan to address its future needs for
         capital, which includes this rights offering. We have engaged an investment-banking firm to assist with this process. While
         we are committed to the completion and execution of the plan and is devoting necessary resources to achieve that result, we
         may not be able to execute on the plan successfully under current market conditions.

            We may not be able to operate profitably without the revenue stream from our discontinued operations.

              Our losses in 2008 and 2009 were largely due to the operating losses at Royal Palm Bank and Heartland Bank. These
         losses were partially offset by the operating profits (net of goodwill impairment charges) of Marine Bank & Trust, Brown
         County State Bank, and HNB National Bank, which were subsequently sold. While we believe we have addressed the
         majority of the asset quality issues responsible for the operating losses at Royal Palm Bank and Heartland Bank, additional
         unforeseen losses could have a material adverse effect on our results of operations and financial condition.

               In 2009, we reported a consolidated net loss of $58.5 million, which included net operating profits of $5.0 million
         attributable to the discontinued operations. In the first quarter of 2010, we reported consolidated net income of $984
         thousand, comprised of a net loss from continuing operations of $2.2 million, offset by net income from discontinued
         operations (including the gain on the sale of Marine Bank & Trust and Brown County State Bank in February 2010) of
         $3.2 million.

             The discontinued operations accounted for approximately 41% of total consolidated revenues in 2009, and
         approximately 34% in the first quarter of 2010.

            Changes in the domestic interest rate environment could negatively affect our net interest income.

              Interest rate risk is the risk that changes in market rates and prices will adversely affect financial condition or results of
         operations. Net interest income is our largest source of revenue and is highly dependent on achieving a positive spread
         between the interest earned on loans and investments and the interest paid on deposits and borrowings. Changes in interest
         rates could negatively impact the ability to attract deposits, make loans, and achieve a positive spread resulting in
         compression of the net interest margin.


            Liquidity risk may affect our ability to meet future contractual obligations.

              Liquidity risk is the risk that we will have insufficient cash or access to cash to satisfy current and future financial
         obligations, including demands for loans and deposit withdrawals, funding operating costs, and for other
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         corporate purposes. Liquidity risk arises whenever the maturities of financial instruments included in assets and liabilities
         differ. Our liquidity could be constrained in particular by an unexpected inability to access the capital markets due to a
         variety of market dislocations or interruptions. Results of operations could be affected if we were unable to satisfy current or
         future financial obligations.

            The financial services industry is highly competitive, and competitive pressures could intensify and adversely affect our
            financial results.

              We operate in a highly competitive industry that could become even more competitive as a result of legislative,
         regulatory and technological changes and continued consolidation. We compete with other commercial banks, savings and
         loan associations, mutual savings banks, finance companies, mortgage banking companies, credit unions and investment
         companies. In addition, technology has lowered barriers to entry and made it possible for non-banks to offer products and
         services traditionally provided by banks. Many of these competitors have fewer regulatory constraints and some have lower
         cost structures.

            We face operational risks, including systems failure risks.

              We may suffer from operational risks, which may create loss resulting from human error, inadequate or failed internal
         processes and systems, and other external events. Losses may occur due to violations of, or noncompliance with, laws, rules,
         regulations, prescribed practices, or ethical standards. In addition, our computer systems and network infrastructure, like that
         used by competitors, is always vulnerable to unforeseen problems. These problems may arise in both internally developed
         systems and the systems of third-party service providers. Our operations are dependent upon the ability to protect computer
         equipment against physical damage as well as security risks, which include hacking or identity theft.

            We rely on other companies to provide key components of our business infrastructure.

               Third party vendors provide key components of business infrastructure such as internet connections and network
         access. These parties are beyond our control, and any problems caused by these third parties, including their not providing
         their services for any reasons or their performing their services poorly, could adversely affect the ability to deliver products
         and services to customers and otherwise to conduct business.


            Significant legal actions could subject us to substantial uninsured liabilities.

              From time to time we are subject to claims related to operations. These claims and legal actions, including supervisory
         actions by regulators, could involve large monetary claims and significant defense costs. To protect us from the cost of these
         claims, insurance coverage is maintained in amounts and with deductibles believed to be appropriate, but this insurance
         coverage may not cover all claims or continue to be available at a reasonable cost. As a result, we may be exposed to
         substantial uninsured liabilities, which could adversely affect results of operations and financial condition.

            Changes in accounting standards may materially impact our financial statements.

              From time to time, the Financial Accounting Standards Board (FASB) changes the financial accounting and reporting
         standards that govern the preparation of financial statements. These changes can be hard to predict and can materially impact
         how we record and report financial condition and results of operations. In some cases, it may be necessary to apply a new or
         revised standard retroactively, resulting in the significant restatement of prior period financial statements.

         Risks Related to the Rights Offering

            As a holder of common shares, you may suffer significant dilution of your percentage ownership of our common
            shares if you do not fully exercise your basic subscription right.

              If you do not exercise your basic subscription rights in full and your Units not purchased are purchased by other
         stockholders in the rights offering, your proportionate voting and ownership interest will be reduced and the percentage that
         your original shares represent of our expanded equity after exercise of the subscription rights will be diluted. The magnitude
         of the reduction of your percentage ownership will depend upon the extent to which you and others subscribe in the rights
         offering.
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            We may cancel the rights offering.

              We may unilaterally withdraw or terminate this rights offering in our discretion prior to the acceptance of any
         subscriptions until the expiration of the rights offering. If we elect to withdraw or terminate the rights offering, neither we
         nor the subscription agent will have any obligation with respect to the subscription rights except to return, without interest or
         penalty, any subscription payments.


            To exercise your subscription rights, you need to act promptly and follow subscription instructions.

               If you desire to purchase Units in this rights offering, you must act promptly to ensure that all required forms and basic
         subscription payments and over-subscription payments, if any, are actually received by the subscription agent at or prior to
         5:00 p.m., New York City time, on [ • ], 2010, the expiration of the rights offering. If you fail to complete and sign the
         required subscription forms, send an incorrect payment amount, or otherwise fail to follow the subscription procedures that
         apply to your desired transaction, we may, depending on the circumstances, reject your subscription or accept it to the extent
         of the payment received. If your exercise is rejected, your payment of the exercise price will be promptly returned. Neither
         we nor our subscription agent undertakes to contact you concerning, or attempt to correct, an incomplete or incorrect
         subscription form or payment. We have the sole discretion to determine whether a subscription exercise properly follows the
         subscription procedures and to decide all questions as to the validity, form and eligibility (including times of receipt and
         beneficial ownership). Alternative, conditional or contingent subscriptions will not be accepted. We reserve the absolute
         right to reject any subscriptions not properly submitted. In addition, we may reject any subscription if the acceptance of the
         subscription would be unlawful. We also may waive any irregularities (or conditions) in the subscription. If you are given
         notice of a defect in your subscription, you will have five business days after the giving of notice to correct it. You will not,
         however, be allowed to cure any defect later than 5:00 p.m., New York City time, on the expiration date. We are not
         obligated to give you notification of defects in your subscription. We will not consider an exercise to be made until all
         defects have been cured or waived.


            The subscription price is not a reflection of our value.

              The subscription price of $[ • ] per Unit was determined by our board of directors. Our board of directors set the $[ • ]
         per Unit subscription price after considering a variety of factors discussed under ―The Rights Offering — Determination of
         Subscription Price.‖ The price, however, does not necessarily bear any relationship to the book value of our assets or our
         past operations, cash flows, earnings or financial condition or any other established criteria for value. Because the
         subscription price is based on an approximate midpoint in a range, it may be above the trading price of our common stock as
         of the date hereof and if the trading price is above that level, it would be advantageous for stockholders to purchase
         additional shares of our common stock on the NYSE Amex rather than pursuant to the rights offering. Our shares of
         common stock may trade at prices below the subscription price after the completion of this offering, and we cannot assure
         you that you will be able to sell shares purchased during this offering at a price equal to or greater than the $[ • ] per Unit
         subscription price.


            You may not revoke your subscription exercise, even if the rights offering is extended by our board of directors, and
            you could be committed to buying shares above the prevailing market price.

              Once you exercise your subscription rights, you may not revoke the exercise of such rights. If our board of directors
         decides to exercise its option to extend the rights offering, you still may not revoke the exercise of your subscription rights.
         Because the subscription price is based on an approximate midpoint in a range, it may be above the trading price of our
         common stock as of the date hereof and if the trading price is above that level, it would be advantageous for stockholders to
         purchase additional shares of our common stock on the NYSE Amex rather than pursuant to the rights offering. The public
         trading market price of our common stock may decline before the subscription rights expire. If you exercise your
         subscription rights and, afterwards, the public trading market price of our common stock remains below the subscription
         price, you will have committed to buying shares of our common stock at a price above the prevailing market price, in which
         case you will have an immediate, unrealized loss. Following the exercise of your rights, you might not be able to sell your
         shares of common stock at a price equal to or greater than the subscription price, and you may lose all or part of your
         investment in our common stock.


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            Our common stock is traded on the NYSE Amex under the symbol ―MBR‖, and the last reported sales price of our
         common stock on the NYSE Amex on the record date was $[ • ] per share.

            You may not be able to resell any shares of our common stock that you purchase pursuant to the exercise of
            subscription rights immediately upon expiration of the subscription rights offering period or be able to sell your shares
            at a price equal to or greater than the subscription price.

               If you exercise subscription rights, you may not be able to resell the common stock purchased by exercising your
         subscription rights until you, or your broker, custodian bank or other nominee, if applicable, have received those shares.
         Moreover, you will have no rights as a stockholder of the shares you purchased in the rights offering until we issue the
         shares to you. Although we will endeavor to issue the shares as soon as practicable after completion of the rights offering or
         the acceptance earlier of subscriptions relating to basic subscription rights, including the guaranteed delivery period and after
         all necessary calculations have been completed, there may be a delay between the expiration date of the rights offering and
         the time that the shares are issued. In addition, we cannot assure you that, following the exercise of your subscription rights,
         you will be able to sell your common stock at a price equal to or greater than the subscription price.

            The market price of our common stock may never exceed the exercise price of the warrants issued in connection with
            this offering.

               The warrants being issued in connection with this offering become exercisable on their date of issuance and will expire
         five years thereafter. The market price of our common stock may never exceed the exercise price of these warrants prior to
         their date of expiration. Any warrants not exercised by their date of expiration will expire, and we will be under no further
         obligation to the warrant holder.

            We may choose to redeem outstanding warrants at a time that is disadvantageous to our warrant holders.

                We may redeem the warrants at any time after the second anniversary of the closing of the rights offering, in whole and
         not in part, at a price of $[ • ] per warrant, upon a minimum of [ • ] days prior written notice of redemption, if and only if, the
         last sales price of our common stock equals or exceeds [ • ] per share for any 60 consecutive days in a period ending three
         business days before the notice of redemption is sent. Redemption of the warrants could force the warrant holders (i) to
         exercise the warrants and pay the exercise price therefore at a time when it may be disadvantageous for the holders to do so,
         (ii) to sell the warrants at the then current market price when they might otherwise wish to hold the warrants, or (iii) to
         accept the nominal redemption price which, at the time the warrants are called for redemption, is likely to be substantially
         less than the market value of the warrants.

            Since the warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.

               In the event a bankruptcy or reorganization proceeding is commenced by or against us, a bankruptcy court may hold
         that any unexercised warrants are executory contracts that are subject to rejection by us with the approval of the bankruptcy
         court. As a result, holders of the warrants may, even if we have sufficient funds, not be entitled to receive any consideration
         for their warrants or may receive an amount less than they would be entitled to if they had exercised their warrants prior to
         the commencement of any such bankruptcy or reorganization proceeding.

            The receipt of the subscription rights may be treated as a taxable dividend to you.

               We intend to take the position that the distribution of the subscription rights in this rights offering is a non-taxable stock
         dividend under the Internal Revenue Code of 1986, as amended, referred to in this prospectus as the Code. See ―Material
         U.S. Federal Income Tax Consequences‖ below. This position is not binding on the Internal Revenue Service, or IRS, or the
         courts, however. If the IRS or a court were to successfully assert that the distribution of the subscription rights is a taxable
         distribution of property, your receipt of subscription rights in this rights offering may be treated as a receipt of a distribution
         in an amount equal to the fair market value of the rights. Any such distribution would be treated as dividend income to the
         extent of our current and accumulated earnings and profits, with any excess being treated as a return of capital to the extent
         thereof and then as capital gain. If you are not a U.S. stockholder (as defined in ―Material U.S. Federal Income Tax
         Consequences‖), you may be subject to tax in respect of any taxable stock dividend. See ―Material U.S. Federal Income Tax
         Consequences‖ below.


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                                                             USE OF PROCEEDS

              Assuming that all subscription rights are exercised, we estimate that the net proceeds from this rights offering will be
         approximately $[ • ] million, after deducting offering expenses. We will have broad discretion in determining how the net
         proceeds of this rights offering will be used. We currently intend to use the net proceeds of this rights offering for general
         corporate purposes, including contribution of amounts to the capital of, and to support, our subsidiary banks as needed. The
         net proceeds may be temporarily invested in short-term investment grade instruments or U.S. government securities.


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                                                              CAPITALIZATION

              The following table sets forth our consolidated capitalization as of June 30, 2010, on an actual basis, and as adjusted to
         reflect the effect of this rights offering. We have assumed net proceeds of approximately $[ • ] will result from the sale of the
         Units offered by this prospectus, after deducting estimated offering expenses. You should read this information together with
         our consolidated financial statements and related notes, which are included or incorporated in this prospectus.


                                                                                                                As of June 30, 2010
         Equity                                                                                             Actual            As Adjusted
                                                                                                          (Dollars in thousands except per
                                                                                                                   share amount)


         Common Stock, $0.42 par value; authorized 30,000,000 shares; 8,887,113 issued and
           8,703,330 outstanding                                                                         $    3,629
         Additional paid-in capital                                                                          11,919
         Retained earnings                                                                                   21,604
         Accumulated other comprehensive income                                                               3,148
                                                                                                             40,300
         Less treasury stock, at cost, 183,783 shares                                                        (2,295 )
           Total stockholders’ equity                                                                        38,005
         Non-controlling interest                                                                             1,790
            Total equity                                                                                 $ 39,795



                                                                        22
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                                     MARKET FOR COMMON STOCK AND DIVIDEND POLICY

              Our common stock is listed on the NYSE Amex under the symbol ―MBR.‖ The last reported sales price of our common
         stock on the NYSE Amex on August [ • ], 2010, was $[ • ] per share. As of August [ • ], 2010, we had [ • ] shares of common
         stock outstanding, held of record by approximately [ • ] stockholders of record.

              The following table sets forth, for the periods indicated, the high and low sales prices per share for the common stock as
         reported on the NYSE Amex for the periods shown as well as the quarterly dividends declared.


                                                                                                  Low            High       Dividends


               2010    3 rd – (through August [ • ], 2010)                                    $              $             $
                       2 nd                                                                   $    3.53      $     2.35    $     N/A
                       1 st                                                                   $    2.90      $     2.22    $     N/A
                                                                                                                           $     N/A

               2009    4 th                                                                   $ 3.90         $     2.25    $     N/A
                       3 rd                                                                   $ 4.98         $     2.90    $     N/A
                       2 nd                                                                   $ 7.75         $     4.25    $     N/A
                       1 st                                                                   $ 10.67        $     5.29    $     N/A
                                                                                                                           $     N/A

               2008    4 th                                                                   $   17.11      $   10.55     $     0.06
                       3 rd                                                                   $   17.94      $   15.22     $     0.06
                       2 nd                                                                   $   18.39      $   14.77     $     0.06
                       1 st                                                                   $   18.03      $   16.51     $     0.06
                                                                                                                           $     0.24



                                                                       23
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                                                      DESCRIPTION OF SECURITIES


         Common Stock

              We are authorized under Delaware law to issue up to 30,000,000 shares of common stock. There were 8,703,330 shares
         of common stock issued and outstanding as of August [ • ], 2010.

              Each share of common stock has the same relative rights and is identical in all respects with every other share of stock.
         The holders of common stock possess exclusive voting rights in the company. Each holder of common stock is entitled to
         only one vote for each share held of record on all matters submitted to a vote of holders of common stock and is not
         permitted to cumulate votes in the election of our directors. Holders do not possess any dividend or liquidation rights.

              Holders of common stock do not have preemptive rights with respect to any additional shares of common stock that
         may be issued. Therefore, we may sell shares of common stock without first offering such shares to existing stockholders.
         The common stock is not subject to call for redemption and may not be converted to any other class of securities, and the
         outstanding shares of common stock are fully paid and non-assessable.

              We are also subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. In
         general, Section 203 prohibits a publicly held Delaware corporation from engaging in a ―business combination‖ with an
         ―interested stockholder‖ for a period of three years after the date of the transaction in which the person became an interested
         stockholder, unless the business combination is approved in a prescribed manner. For purposes of Section 203, a ―business
         combination‖ includes a merger, asset sale or other transaction resulting in a financial benefit to the interested stockholder,
         and an ―interested stockholder‖ is a person who, together with affiliates and associates, owns, or within three years prior, did
         own, 15% or more of the voting stock of the Delaware corporation.

              Also, under federal law, the acquisition by any holder of ten percent (10%) or more (or five percent (5%) or more if the
         acquirer is another bank holding company) of the issued and outstanding shares of common stock generally requires prior
         regulatory approval.

              We also have the authority to issue 100,000 shares of preferred stock having a par value of $0.01, of which no shares
         were issued and outstanding as of August [ • ], 2010. None of the shares of preferred stock will be issued as part of the
         offering. Preferred stock may be issued with preferences and designations as our board of directors may from time to time
         determine. Our board of directors may, without stockholder approval, issue shares of preferred stock with voting, dividend,
         liquidation and conversion rights that could dilute the voting strength of the holders of the common stock.

               Illinois Stock Transfer Co. is our transfer agent common with respect to the common stock.


         Warrants

         Common Stock Subject to Warrants

             Each warrant initially represents the right to purchase one share of our common stock. The number of shares deliverable
         upon the exercise of each warrant is subject to the adjustments described below under the heading ―— Adjustments to the
         Warrants.‖


         Exercise of the Warrants

               Each warrant to be issued as part of the Units will have a five year term and will give the holder the right to purchase
         one share of our common stock at an exercise price of $[ • ] per share, subject to our right to call the warrants after the
         second anniversary of the distribution date if the trading price of a share of our common stock exceeds 150% of the exercise
         price of the warrant ($[ • ] per share) for 60 consecutive days. All or any portion of the warrants may be exercised in whole
         or in part at any time or from time to time on or before 5:00 p.m., New York City time, on the fifth anniversary of the
         distribution date, by surrender to the warrant agent of the warrant and a completed notice of exercise attached as an annex to
         the warrant and the payment of the exercise price per share for the shares of common stock for which the warrants are being
         exercised. The exercise price applicable to the warrants
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         is subject to adjustment described below under the heading ―— Adjustments to the Warrants.‖ So long as the warrants are in
         global form, any exercise notice will be delivered to the warrant agent through and in accordance with the procedures of the
         depository for the warrants.

              Upon exercise of warrants, the shares of common stock issuable upon exercise will be issued by our transfer agent for
         the account of the exercising warrantholder. Shares issued upon exercise of warrants will be issued in the name or names
         designated by the exercising warrantholder and will be delivered by the transfer agent to the exercising warrantholder (or its
         nominee or nominees) either via book-entry transfer crediting the account of such warrantholder (or the relevant participant
         of The Depository Trust Company, or DTC for the benefit of such warrantholder) through DTC’s DWAC system, or
         otherwise in certificated form by physical delivery to the address specified by such warrantholder in the exercise notice. We
         will not issue fractional shares upon any exercise of the warrants. Instead, the exercising warrantholder will be entitled to a
         cash payment equal to the pro-rated per share market price of our common stock on the date of exercise of the warrants for
         any fractional share that would have otherwise been issuable upon exercise of the warrants. We will at all times reserve the
         aggregate number of shares of our common stock for which the warrants may be exercised.

              Issuance of any shares of our common stock deliverable upon the exercise of warrants will be made without charge to
         the warrantholder for any issue or transfer tax or other incidental expense in respect of the issuance of those shares (other
         than liens or charges created by a warrantholder, income and franchise taxes incurred in connection with the exercise of the
         warrant or taxes in respect of any transfer occurring contemporaneously therewith).

             The shares of common stock issuable upon the exercise of the warrants will be listed on the NYSE Amex under the
         symbol ―MBR.‖


         Right as a Stockholder

              The warrantholders will have no rights or privileges of holders of our common stock, including any voting rights or
         rights to dividend payments, until (and then only to the extent) the warrants have been exercised.


         Adjustments to the Warrants

             Pursuant to the terms of the warrants, the number of shares of our common stock issuable upon exercise of each
         warrant, which we refer to as the warrant shares, and the warrant exercise price will be adjusted upon occurrence of certain
         events as follows.

               • In the case of stock splits, subdivisions, reclassifications or combinations of common stock . If we declare and pay a
                 dividend or make a distribution on our common stock in shares of common stock, subdivide or reclassify the
                 outstanding shares of our common stock into a greater number of shares, or combine or reclassify the outstanding
                 shares of our common stock into a smaller number of shares, the number of warrant shares at the time of the record
                 date for such dividend or distribution or the effective date of such subdivision, combination or reclassification will
                 be proportionately adjusted so that the holder of a warrant after such date will be entitled to purchase the number of
                 shares of our common stock that it would have owned or been entitled to receive in respect of the number of warrant
                 shares had such warrant been exercised immediately prior to such date. The exercise price in effect immediately
                 prior to the record date for such dividend or distribution or the effective date of such subdivision, combination or
                 reclassification will be adjusted by multiplying such exercise price by the quotient of (x) the number of warrant
                 shares immediately prior to such adjustment divided by (y) the new number of warrant shares as determined in
                 accordance with the immediately preceding sentence.

               • In the case of cash dividends or other distributions. If we fix a record date for making a distribution to all holders
                 of our common stock of securities, evidences of indebtedness, assets, cash, rights or warrants (excluding ordinary
                 cash dividends (as defined below), dividends of our common stock and other dividends or distributions referred to in
                 the preceding bullet point), the exercise price in effect prior to such record date will be reduced immediately
                 thereafter to the price determined by multiplying the exercise price in effect immediately prior to the reduction by
                 the quotient of (x) the market price (as defined below) of our common


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                    stock on the last trading day preceding the first date on which our common stock trades regular way on the principal
                    national securities exchange on which our common stock is listed or admitted to trading without the right to receive
                    such distribution, minus the amount of cash and/or the fair market value of the securities, evidences of indebtedness,
                    assets, rights or warrants to be so distributed in respect of one share of our common stock (such subtracted amount
                    and/or fair market value, the ―Per Share Fair Market Value‖) divided by (y) such market price on the date specified
                    in clause (x). Any such adjustment will be made successively whenever such a record date is fixed. The number of
                    warrant shares will be increased to the number obtained by multiplying the number of warrant shares deliverable
                    upon exercise of a warrant immediately prior to such adjustment by the quotient of (a) the exercise price in effect
                    immediately prior to the distribution giving rise to this adjustment divided by (b) the new exercise price as
                    determined in accordance with the immediately preceding sentence. In the case of adjustment for a cash dividend
                    that is, or is coincident with, a regular quarterly cash dividend, the Per Share Fair Market Value would be reduced
                    only by the per share amount of the portion of the cash dividend that would constitute an ordinary cash dividend. If,
                    after the declaration of any such record date, the related distribution is not made, the exercise price and the number
                    of warrant shares then in effect will be readjusted, effective as of the date when our board of directors determines not
                    to make such distribution, to the exercise price and the number of warrant shares that would then be in effect if such
                    record date had not been fixed.

               • In the case of a pro rata repurchase of common stock. A ―pro rata repurchase‖ is defined as any purchase of shares
                 of our common stock by us or an affiliate of ours pursuant to any tender offer or exchange offer subject to
                 Section 13(e) or 14(e) of the Exchange Act, or Regulation 14E thereunder, or any other offer available to
                 substantially all holders of our common stock. If we effect a pro rata repurchase of our common stock, then the
                 exercise price will be reduced to the price determined by multiplying the exercise price in effect immediately prior
                 to the effective date (as defined below) of such pro rata repurchase by a fraction of which (A) the numerator will be
                 (i) the product of (x) the number of shares of our common stock outstanding immediately before such pro rata
                 repurchase and (y) the market price of a share of our common stock on the trading day immediately preceding the
                 first public announcement by us or any of our affiliates of the intent to effect such pro rata repurchase, minus (ii) the
                 aggregate purchase price of the pro rata repurchase, and (B) the denominator will be the product of (i) the number of
                 shares of our common stock outstanding immediately prior to such pro rata repurchase minus the number of shares
                 of our common stock so repurchased and (ii) the market price per share of our common stock on the trading day
                 immediately preceding the first public announcement by us or any of our affiliates of the intent to effect such pro
                 rata repurchase. The number of warrant shares will be increased to the number obtained by multiplying the number
                 of warrant shares immediately prior to such adjustment by the quotient of (x) the exercise price in effect
                 immediately prior to the pro rata repurchase giving rise to this adjustment divided by (y) the new exercise price as
                 determined in accordance with the immediately preceding sentence. For the avoidance of doubt, no increase to the
                 exercise price or decrease in the number of warrant shares deliverable upon exercise of a warrant will be made
                 pursuant to this adjustment provision. The ―effective date‖ of a pro rata repurchase means (a) the date of acceptance
                 of shares for purchase or exchange by us under any tender offer or exchange offer which is a pro rata repurchase or
                 (b) the date of purchase of any pro rata repurchase that is not a tender offer or an exchange offer.

               • In the case of a merger, consolidation, statutory share exchange or similar transaction that requires the approval of
                 our stockholders (any such transaction, a “business combination”) . In the event of any business combination or
                 reclassification of our common stock (other than a reclassification referenced in the first bullet point above), a
                 warrantholder’s right to receive shares of our common stock upon exercise of a warrant will be converted into the
                 right to exercise that warrant to acquire the number of shares of stock or other securities or property (including cash)
                 which our common stock issuable (at the time of such business combination or reclassification) upon exercise of
                 such warrant immediately prior to such business combination or reclassification would have been entitled to receive
                 upon consummation of such business combination or reclassification. In determining the kind and amount of stock,
                 securities or the property receivable upon exercise of a warrant following the consummation of such business
                 combination, if the holders of our common stock have the right to elect the kind or amount of consideration
                 receivable upon consummation of such business combination, then the consideration that a warrantholder will be
                 entitled to


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                    receive upon exercise will be deemed to be the types and amounts of consideration received by the majority of all
                    holders of the shares of our common stock that affirmatively make an election (or of all such holders if none make
                    an election). For purposes of determining any amount of warrant shares to be withheld by us as payment of the
                    exercise price from stock, securities or the property that would otherwise be delivered to a warrantholder upon
                    exercise of warrants following any business combination, the amount of such stock, securities or property to be
                    withheld will have a market price equal to the aggregate exercise price as to which such warrants are so exercised,
                    based on the fair market value of such stock, securities or property on the trading day on which such warrants are
                    exercised and notice is delivered to the warrant agent. If any such property is not a security, the market price of such
                    property will be deemed to be its fair market value as determined in good faith by our board of directors in reliance
                    on an opinion of a nationally recognized independent investment banking corporation retained by us for this
                    purpose. If making such determination requires the conversion of any currency other than U.S. dollars into
                    U.S. dollars, such conversion will be done in accordance with customary procedures based on the rate for conversion
                    of such currency into U.S. dollars displayed on the relevant page by Bloomberg L.P. (or any successor or
                    replacement service) on or by 4:00 p.m., New York City time, on such exercise date.

              Neither the exercise price nor the number of shares issuable upon exercise of a warrant will be adjusted in the event of a
         change in the par value of our common stock or a change in our jurisdiction of incorporation. If an adjustment in the exercise
         price made in accordance with the adjustment provisions above would reduce the exercise price to an amount below the par
         value of our common stock, then that adjustment will reduce the exercise price to that par value.

              The warrant agent will notify the warrantholders of any adjustments. If the warrant agent fails to give such notice, the
         exercise price and the number of shares issuable upon exercise of the warrants will nevertheless be adjusted.

              If more than one adjustment provision applies to a single event, the adjustment provision that produces the largest
         adjustment with respect to such event will be applied, and no single event will cause an adjustment under more than one
         adjustment provision so as to result in duplication. All such adjustments will be made to the nearest one-tenth (1/10th) of a
         cent or to the nearest one-hundredth (1/100th) of a share, as the case may be. No adjustment in the exercise price or the
         number of shares issuable upon exercise of a warrant will be made if the amount of such adjustment would be less than
         $0.01 or one-tenth (1/10th) of a share of our common stock, but any such amount will be carried forward and an adjustment
         with respect thereto will be made at the time of and together with any subsequent adjustment which, together with such
         amount and any other amount or amounts so carried forward, will aggregate $0.01 or 1/10th of a share of our common stock,
         or more, or on exercise of a warrant if that occurs earlier.

               For purposes of these adjustment provisions:

               “ordinary cash dividends” means a regular quarterly cash dividend on shares of our common stock out of surplus or net
         profits legally available therefor (determined in accordance with generally accepted accounting principles in effect from time
         to time). Ordinary cash dividends will not include any cash dividends paid subsequent to December 31, 2008 to the extent
         the aggregate per share dividends paid on our outstanding common stock in any quarter exceed $0.06, as adjusted for any
         stock split, stock dividend, reverse stock split, reclassification or similar transaction.

               “market price” means, with respect to a particular security, on any given day, the last reported sale price regular way
         or, in case no such reported sale takes place on such day, the average of the last closing bid and ask prices regular way, in
         either case on the principal national securities exchange on which the applicable securities are listed or admitted to trading,
         or if not listed or admitted to trading on any national securities exchange, the average of the closing bid and ask prices as
         furnished by two FINRA members selected from time to time by us for that purpose, and will be determined without
         reference to after hours or extended hours trading. If such security is not listed and traded in a manner that the quotations
         referred to above are available for the period required under the warrants, the market price will be deemed to be the fair
         market value per share of such security as determined in good faith by our board of directors in reliance on an opinion of a
         nationally recognized independent investment banking corporation retained by us for this purpose. If any such security is
         listed or traded on a non-U.S. market, such fair market value will be determined by reference to the closing price of such
         security as of the end of the most


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         recently ended business day in such market prior to the date of determination. If making any such determination requires the
         conversion of any currency other than U.S. dollars into U.S. dollars, such conversion will be done in accordance with
         customary procedures based on the rate for conversion of such currency into U.S. dollars displayed on the relevant page by
         Bloomberg L.P. (or any successor or replacement service) on or by 4:00 p.m., New York City time, on such exercise date.
         For the purposes of determining the market price of our common stock on the ―trading day‖ preceding, on or following the
         occurrence of an event, (i) that trading day will be deemed to commence immediately after the regular scheduled closing
         time of trading on the Exchange or, if trading is closed at an earlier time, such earlier time and (ii) that trading day will end
         at the next regular scheduled closing time, or if trading is closed at an earlier time, such earlier time (for the avoidance of
         doubt, and as an example, if the market price is to be determined as of the last trading day preceding a specified event and
         the closing time of trading on a particular day is 4:00 p.m. and the specified event occurs at 5:00 p.m. on that day, the market
         price would be determined by reference to such 4:00 p.m. closing price).


         Amendment

              Any warrants may be amended and the observance of any material term of such warrants may be waived with the
         consent of a majority of the holders of such warrants; provided, that the consent of each affected warrantholder is necessary
         for any amendment (i) to increase the exercise price or to decrease the number of shares issuable upon exercise of the
         warrants (other than pursuant to the terms of the adjustment provisions in the warrant certificate described above), (ii) that
         would shorten the time period during which the warrants are exercisable or (iii) that would change in a manner adverse to
         such warrantholder the terms of the adjustment provisions in the warrant certificate described above.


         Description of the Warrant Agreement

              Under the warrant agreement, Illinois Stock Transfer Co. is appointed as the warrant agent to act on our behalf in
         connection with the transfer, exchange, redemption, exercise and cancellation of the warrants and required to maintain a
         registry recording the names and addresses of all registered holders of warrants. The warrant agent will receive a fee in
         exchange for performing these duties under the warrant agreement and will be indemnified by us for liabilities not involving
         gross negligence, willful misconduct or bad faith and arising out of its service as warrant agent.

               The warrants will initially be issued in the form of one or more global warrants as specified in the warrant agreement.
         Each global warrant will be deposited upon issuance with, or on behalf of, DTC, and will be registered in the name of DTC
         or a nominee of DTC, in each case for credit to the account of a direct or indirect participant in DTC. For a description of
         book-entry procedures and settlement mechanics generally applicable to securities held through DTC participants, see the
         section entitled ―Book-Entry Issuance‖ below. Owners of a beneficial interest in any global warrant are entitled to receive a
         warrant in definitive form not held by a depository or the warrant agent only if (i) DTC is unwilling or unable to continue as
         depository for the global warrant or ceases to be a ―clearing agency‖ under the Exchange Act (and, in each case, no
         successor depository is appointed within 90 days), (ii) we, in our sole discretion, notify the warrant agent of our election to
         issued warrants in definitive form under the warrant agreement or (iii) we have been adjudged bankrupt, consented to the
         filing of bankruptcy proceedings, or filed a petition, answer or consent seeking to reorganize under federal or state law.


         Governing Law

               The warrants will be governed by New York law.


         Book-Entry Issuance

              The warrants may be issued as global warrants and deposited with a depositary. The following is a summary of the
         depositary arrangements applicable to warrants issued in permanent global form and for which DTC will act as depositary
         (the ―global warrants‖). The information in this section concerning DTC and DTC’s book-entry system has been obtained
         from sources that we believe to be reliable, but we take no responsibility for the accuracy thereof.


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             Each global warrant will be deposited with, or on behalf of, DTC, as depositary, or its nominee and registered in the
         name of a nominee of DTC. Except under the limited circumstances described below, global warrants will not be
         exchangeable for certificated warrants.

              Only institutions that have accounts with DTC or its nominee (―DTC participants‖) or persons that may hold interests
         through DTC participants may own beneficial interests in a global warrant. DTC will maintain records evidencing ownership
         of beneficial interests by DTC participants in the global warrants and transfers of those ownership interests. DTC
         participants will maintain records evidencing ownership of beneficial interests in the global warrants by persons that hold
         through those DTC participants and transfers of those ownership interests within those DTC participants. DTC has no
         knowledge of the actual beneficial owners of the warrants. You will not receive written confirmation from DTC of your
         purchase, but we do expect that you will receive written confirmations providing details of the transaction, as well as
         periodic statements of your holdings from the DTC participant through which you entered the transaction. The laws of some
         jurisdictions require that certain purchasers of securities take physical delivery of those securities in certificated form. Those
         laws may impair your ability to transfer beneficial interests in a global warrant.

               DTC has advised us that upon the issuance of a global warrant and the deposit of that global warrant with DTC, DTC
         will immediately credit, on its book-entry registration and transfer system, the number of warrants represented by that global
         warrant to the accounts of DTC participants.

              We will make any payments on warrants represented by a global warrant to DTC or its nominee, as the case may be, as
         the registered owner and holder of the global warrant representing those securities. DTC has advised us that upon receipt of
         any payment on a global warrant, DTC will immediately credit accounts of DTC participants with payments in amounts
         proportionate to their respective beneficial interests in that warrant, as shown in the records of DTC. Standing instructions
         and customary practices will govern payments by DTC participants to owners of beneficial interests in a global warrant held
         through those DTC participants, as is now the case with securities held for the accounts of customers in bearer form or
         registered in ―street name.‖ Those payments will be the sole responsibility of those DTC participants, subject to any
         statutory or regulatory requirements in effect from time to time.

              Neither we nor our agents will have any responsibility or liability for any aspect of the records of DTC, any nominee or
         any DTC participant relating to, or payments made on account of, beneficial interests in a global warrant or for maintaining,
         supervising or reviewing any of the records of DTC, any nominee or any DTC participant relating to those beneficial
         interests.

             A global warrant is exchangeable for certificated warrants registered in the name of a person other than DTC or its
         nominee only if:

               • DTC notifies us that it is unwilling or unable to continue as depository for that global warrant or DTC ceases to be
                 registered under the Exchange Act;

               • we determine in our discretion that the global warrant will be exchangeable for certificated warrants in registered
                 form;

               • we are adjudged bankrupt or insolvent, make an assignment for the benefit of our creditors or upon certain similar
                 events.

               Any global warrant that is exchangeable as described in the preceding sentence will be exchangeable in whole for
         certificated warrants in registered form. The registrar will register the certificated warrants in the name or names instructed
         by DTC. We expect that those instructions may be based upon directions received by DTC from DTC participants with
         respect to ownership of beneficial interests in the global warrant.

             Except as provided above, as an owner of a beneficial interest in a global warrant, you will not be entitled to receive
         physical delivery of warrants in certificated form and will not be considered a holder of warrants for any purpose. No global
         warrant will be exchangeable except for another global warrant of like denomination and tenor to be registered in the name
         of DTC or its nominee. Accordingly, you must rely on the procedures of DTC and the DTC participant through which you
         own your interest to exercise any rights of a holder under the global warrant.


                                                                        29
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              We understand that, under existing industry practices, in the event that we request any action of holders, or an owner of
         a beneficial interest in a global warrant desires to take any action that a holder is entitled to take under the terms of the
         warrants, DTC would authorize the DTC participants holding the relevant beneficial interests to take that action, and those
         DTC participants would authorize beneficial owners owning through those DTC participants to take that action or would
         otherwise act upon the instructions of beneficial owners owning through them.

              DTC has advised us that DTC is a limited-purpose trust company organized under the New York Banking Law, a
         ―banking organization‖ within the meaning of the New York Banking Law, a member of the Federal Reserve System, a
         ―clearing corporation‖ within the meaning of the New York Uniform Commercial Code and a ―clearing agency‖ registered
         under the Exchange Act.


            Global Clearance and Settlement Procedures

             Initial settlement for global securities will be made in immediately available funds. DTC participants will conduct
         secondary market trading with other DTC participants in the ordinary way in accordance with DTC rules. Thereafter,
         secondary market trades will settle in immediately available funds using DTC’s same day funds settlement system.

              Although DTC has agreed to the procedures described above in order to facilitate transfers of interests in global
         warrants among DTC participants, DTC is under no obligation to perform those procedures and those procedures may be
         discontinued at any time.


                                                           THE RIGHTS OFFERING

              Before exercising any subscription rights, you should read carefully the information set forth under ―Risk Factors‖
         beginning on page 11.


         The Subscription Rights

         General

              We are distributing to you, at no charge, as of the close of business on [ • ], 2010, the record date, subscription rights to
         purchase one Unit, which consists of one share of our common stock and a warrant to purchase one share of our common
         stock. You will receive one subscription right for every share of common stock you own at the close of business on the
         record date. Each right carries with it a basic subscription right and an over-subscription right.

              If you wish to exercise your subscription rights, you must do so before 5:00 p.m., New York City time, on [ • ], 2010,
         unless we extend this rights offering. After the expiration of this rights offering, the subscription rights will expire and will
         no longer be available.

             The subscription rights will be evidenced by subscription rights certificates, which may be physical certificates but will
         more likely be electronic certificates issued through the facilities of DTC.


         Over-Subscription Right

               General. In addition to your basic subscription right, you may subscribe for additional Units upon delivery of the
         required documents and payment of the subscription price of $[ • ] per Unit, before the expiration of the rights offering. You
         may only exercise your over-subscription right if you exercised your basic subscription right in full and other holders of
         subscription rights do not exercise their basic subscription rights in full. No subscriber can own, as a result of the exercise of
         its over-subscription right, a number of shares and warrants to acquire shares which would result in such subscriber owning,
         as of the consummation of the rights offering, in excess of 9.9% of our common stock, on a fully-diluted basis.

              Pro Rata Allocation. If there are not enough available Units to satisfy all subscriptions made under the
         over-subscription right, we will allocate the remaining Units pro rata among those over-subscribing rights holders. ―Pro rata‖
         means in proportion to the number of Units that all subscription rights holders who have fully exercised their basic
         subscription rights have requested to purchase pursuant to the over-subscription right.
30
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              Full Exercise of Basic Subscription Right. You may exercise your over-subscription right only if you exercise your
         basic subscription right in full. To determine if you have fully exercised your basic subscription right, we will consider only
         the basic subscription right held by you in the same capacity. For example, suppose that you were granted subscription rights
         for shares of our common stock that you own individually and shares of our common stock that you own collectively with
         your spouse. If you wish to exercise your over-subscription right with respect to the subscription rights you own
         individually, but not with respect to the subscription rights you own collectively with your spouse, you only need to fully
         exercise your basic subscription right with respect to your individually owned subscription rights. You do not have to
         subscribe for any Units under the basic subscription right owned collectively with your spouse to exercise your individual
         over-subscription right. When you complete the portion of your subscription rights certificate to exercise your
         over-subscription right, you will be representing and certifying that you have fully exercised your subscription rights as to
         shares of our common stock that you hold in that capacity. You must exercise your over-subscription right at the same time
         you exercise your basic subscription right in full.

              Return of Excess Payment. If you exercised your over-subscription right and are allocated less than all of the Units for
         which you wished to subscribe, your excess payment for shares that were not allocated to you will be returned to you by
         mail, without interest or deduction, promptly after the expiration date of the rights offering.


         Subscription Price

              The subscription price under the subscription rights is $[ • ] per Unit. The subscription price does not necessarily bear
         any relationship to our past or expected future results of operations, cash flows, current financial condition or any other
         established criteria for value. No change will be made to the subscription price by reason of changes in the trading price of
         our common stock or other factors prior to the expiration of this rights offering.


         Determination of Subscription Price

               Our board of directors unanimously set the terms and conditions of this rights offering, including the subscription price,
         the number of Units to be offered, the exercise price of the warrants, the offering period and prohibitions on transferability.
         The board of directors determined that the subscription price should, among other things, be designed to provide a
         reasonable price to our current stockholders to exercise their subscription rights and our board of directors concluded that the
         subscription price is a reasonable price. The board of directors considered many factors, including the amount of proceeds
         desired, the market price of our common stock historically and during the 30 days prior to the announcement of this rights
         offering as well as prior to the commencement of this rights offering, the volatility of the market price of our common stock,
         general conditions in the securities markets, our recent operating results, our financial condition, general conditions in the
         financial services industry, alternatives available to us for raising equity capital and the liquidity of our common stock and
         the fact that we are providing subscribers with an additional benefit in the form of warrants. Ultimately the subscription price
         is an approximate midpoint of a range between the price equal to 90% of the volume weighted average price of our common
         stock during the 30 trading days preceding the announcement of this rights offering and the most recent low closing price of
         our common stock. In addition, the board of directors engaged McClendon, Morrison & Partners, Inc. to advise them with
         respect to whether the rights offering was a reasonable means, from a financial point of view, of raising capital to address the
         capital and liquidity needs of us and our subsidiary banks.

               The subscription price is not necessarily related to our book value, results of operations, cash flows, financial condition,
         net worth or any other established criteria of value and may or may not be considered the fair value of our common stock at
         the time this rights offering was approved by our board of directors during the rights offering period. You should not
         consider the subscription price as an indication of the value of our company or our common stock. We cannot assure you
         that you will be able to sell shares of our common stock purchased in this rights offering at a price equal to or greater than
         the subscription price. On [ • ], 2010, the closing sale price of our common stock on the NYSE Amex was $[ • ] per share. In
         addition, there is currently no market for our warrants and, unless you choose to exercise the warrants for shares of common
         stock, you may not be able to re-sell such warrants.

             The board of directors agreed to pay McClendon, Morrison & Partners, Inc. a fee equal to 2% of the gross proceeds
         from the exercise of rights in this rights offering, subject to certain exceptions (including with respect to


                                                                         31
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         any proceeds from rights exercised by R. Dean Phillips or his related entities or affiliates), upon completion of this rights
         offering, and up to $75,000 in expenses. No portion of the fee was contingent upon approval or completion of the rights
         offering. We have further agreed to indemnify McClendon, Morrison & Partners, Inc. and certain other parties affiliated or
         associated with McClendon, Morrison & Partners, Inc. against certain claims, liabilities and expenses related to or arising in
         connection with the rendering by McClendon, Morrison & Partners, Inc. of its services as described above.


         Expiration Time

              The subscription rights will expire at 5:00 p.m., New York City time, on [ • ], 2010, unless we decide to extend this
         rights offering. If you do not validly exercise your subscription rights prior to that time, your subscription rights will be null
         and void. We will not be required to issue Units to you if the subscription agent receives your subscription rights certificate
         or your payment after that time, regardless of when you sent the subscription rights certificate and payment, unless you send
         them in compliance with the guaranteed delivery procedures described below.


         Minimum Subscriptions

               We are not requiring minimum subscriptions to complete the rights offering.


         Cancellation and Amendment of Rights Offering

              We may cancel this rights offering in our sole discretion at any time prior to the acceptance of any subscriptions for any
         reason, including as a result of a change in the market price of our common stock, or if at any time before completion of the
         rights offering there is any judgment, order, decree, injunction, statute, law or regulation entered, enacted, amended or held
         to be applicable to the rights offering that in the sole judgment of our board of directors would or might make the rights
         offering or its completion, whether in whole or in part, illegal or otherwise restrict or prohibit completion of the rights
         offering. If we cancel the rights offering, in whole or in part, all affected subscription rights will expire without value. If we
         cancel this rights offering, any funds you paid will be refunded, without interest or deduction.

              We reserve the right to amend the terms of this rights offering. If we make an amendment that we consider material, we
         will extend this rights offering and offer all rights holders the right to revoke any subscription submitted prior to such
         amendment upon the terms and conditions we set forth in the amendment. The extension of the expiration date of this rights
         offering will not, in and of itself, be a material amendment for these purposes.


         Acceptance of Subscriptions

              We may, in our discretion, accept from time to time subscriptions relating to basic subscription rights when received
         rather than at the expiration of the rights offering period. If so accepted, funds relating thereto will not be held by the
         subscription agent but will be released to us. If we later cancel or terminate the rights offering, all subscriptions whether or
         not then accepted will be returned to subscribers without interest or deduction. Over-subscription rights will be accepted, if
         then available, only at the expiration of the rights offering period.


         Non-Transferability of Subscription Rights

               Except in the limited circumstances described below, only you may exercise your subscription rights, and you may not
         sell, give away or otherwise transfer your subscription rights.

              You may, however, transfer your subscription rights to any of your affiliates. As used in this rights offering for this
         purpose, an affiliate means any person (including a partnership, corporation or other legal entity, such as a trust or estate)
         which controls, is controlled by or is under common control with you. Your subscription rights also may be transferred by
         operation of law. For example, a transfer of subscription rights to your estate upon your death would be permitted. If your
         subscription rights are transferred as permitted, evidence satisfactory to us that the transfer was proper must be received by
         the subscription agent prior to the expiration time of this rights offering.


                                                                         32
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         Exercise of Subscription Rights

               You may exercise your subscription rights by delivering to the subscription agent on or prior to the expiration time:

               • a properly completed and duly executed subscription rights certificate;

               • any required signature guarantees or other supplemental documentation; and

               • payment in full of $[ • ] per Unit subscribed for pursuant to your basic subscription rights and, if you so choose,
                 pursuant to your over-subscription right.

               You should deliver your subscription rights certificate and payment to the subscription agent at the address set forth in
         this section under the heading ―Subscription Agent.‖ We will not pay you interest on funds delivered to the subscription
         agent pursuant to the exercise of subscription rights.

              You bear all risk for the method of delivery of subscription rights certificates, any necessary accompanying documents
         and payment of the subscription price to the subscription agent. If you send the subscription rights certificate and other items
         by mail, we recommend that you send them by registered mail, properly insured, with return receipt requested. You should
         allow a sufficient number of days to ensure delivery and clearance of cash payment prior to the expiration time.

               We reserve the right to reject any exercise of subscription rights if the exercise does not fully comply with the terms of
         this rights offering or is not in proper form or if the exercise of rights would be unlawful.


         Method of Payment

              Payment for the shares of our common stock subscribed for must be made by personal check payable to ―Illinois Stock
         Transfer Co. acting as Subscription Agent for Mercantile Bancorp, Inc.‖, or wire transfer of immediately available funds to
         account maintained by the subscription agent. Payment will be deemed to have been received by the subscription agent only
         upon the subscription agent’s receipt and clearance of a personal check or wire transfer. Please note that funds paid by
         personal check may take at least five business days to clear. Accordingly, if you wish to pay by means of a personal check,
         we urge you to make payment sufficiently in advance of the expiration time to ensure that the subscription agent receives
         cleared funds before that time.


         Guaranteed Delivery Procedures

               If you wish to exercise your subscription rights, but you do not have sufficient time to deliver the subscription rights
         certificate evidencing your rights to the subscription agent before the expiration time, you may exercise your subscription
         rights by complying with the following guaranteed delivery procedures:

               • provide your payment in full of the subscription price for each Unit being subscribed for pursuant to the basic
                 subscription rights and the over-subscription right to the subscription agent before the expiration time;

               • deliver a notice of guaranteed delivery to the subscription agent at or before the expiration time; and

               • deliver the properly completed subscription rights certificate evidencing the subscription rights being exercised,
                 with any required signatures medallion guaranteed, to the subscription agent, within three business days after the
                 date on which this rights offering expired.

               Your notice of guaranteed delivery must be substantially in the form provided to you with your subscription rights
         certificate. Your notice of guaranteed delivery must come from an eligible institution which is a member of, or a participant
         in, a signature medallion guarantee program acceptable to the subscription agent. In your notice of guaranteed delivery you
         must state:

               • your name;

               • the number of subscription rights represented by your subscription rights certificate, the number of shares of our
                 common stock you are subscribing for pursuant to your basic subscription right and pursuant to your
over-subscription right; and


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               • your guarantee that you will deliver to the subscription agent any subscription rights certificates evidencing the
                 subscription rights you are exercising within three business days following the date on which this rights offering
                 expired.

              You may deliver the notice of guaranteed delivery to the subscription agent in the same manner as the subscription
         rights certificate at the addresses set forth in the section ―— Subscription Agent.‖

              Eligible institutions may also transmit the notice of guaranteed delivery to the subscription agent by facsimile
         transmission to (312) 427-2879. To confirm facsimile deliveries, you may call (800) 757-5755.

             The subscription agent will send you additional copies of the form of notice of guaranteed delivery if you need them.
         You may call the subscription agent at (800) 757-5755.


         Signature Guarantees

              Signatures on the subscription rights certificate do not need to be guaranteed if either the subscription rights certificate
         provides that the Units to be purchased are to be delivered directly to the record owner of such subscription rights, or the
         subscription rights certificate is submitted for the account of a member firm of a registered national securities exchange or a
         member of FINRA, or a commercial bank or trust company having an office or correspondent in the United States.
         Signatures on all other subscription rights certificates must be guaranteed by an Eligible Guarantor Institution, as defined in
         Rule 17Ad-15 of the Exchange Act, subject to the standards and procedures adopted by the subscription agent. Eligible
         Guarantor Institutions include banks, brokers, dealers, credit unions, national securities exchanges and savings associations.


         Rights of Subscribers

              Your exercise of subscription rights in this rights offering will give you no additional rights as a stockholder or
         warrantholder until the shares of our common stock and warrants you have subscribed for in this rights offering are issued to
         you.


         No Revocation of Exercised Subscription Rights

               Once you send in your subscription rights certificate and payment, you cannot revoke the exercise of your subscription
         rights, even if the subscription period has not yet ended or we extend the subscription period, and you later learn information
         about us that you consider to be unfavorable or the market price of our common stock is below the $[ • ] per Unit purchase
         price. However, if we make an amendment to this rights offering that we believe to be material, we will extend this rights
         offering and offer all rights holders the right to revoke any subscription submitted prior to such amendment upon the terms
         and conditions we set forth in the amendment. The extension of the expiration date of this rights offering will not, in and of
         itself, be a material amendment for these purposes. You should not exercise your subscription rights unless you are certain
         that you wish to purchase Units at a price of $[ • ] per Unit.


         Issuance of Units

              Unless we earlier terminate this rights offering, the shares of common stock and warrants comprising the Units
         purchased in this rights offering will be issued as soon as practicable following the expiration of this rights offering to those
         rights holders who have timely and properly completed, signed and delivered a subscription rights certificate together with
         payment of the subscription price for each Unit subscribed for. If we accept subscriptions relating to basic subscription rights
         prior to the termination or expiration of the offering, we will also issue the shares of common stock and warrants comprising
         the Units as soon as practicable following such acceptance. We will accept over-subscription payments only following the
         expiration of the rights offering.

              Your payment of the aggregate subscription price for Units subscribed for will be retained by the subscription agent and
         will not be delivered to us unless and until your subscription is accepted and you are issued your shares of our common stock
         and warrants. You will not be paid any interest on funds paid to the subscription agent, regardless of whether the funds are
         applied to the subscription price or returned to you. You will have no rights as a stockholder of the company with respect to
         the shares of our common stock subscribed for in this rights offering until the
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         certificates representing such shares are issued to you (either in physical form or electronically through the facilities of
         DTC). You will be deemed the owner of the shares of our common stock you purchased pursuant to your exercise of
         subscription rights upon the issuance of the certificates representing the shares. Unless otherwise instructed in the
         subscription rights certificate, the shares issued to you pursuant to your exercise of subscription rights will be registered in
         your name or the name of your nominee, if applicable. We will not issue any fractional shares of our common stock.


         Shares Held for Others

               If you are a broker, a trustee or a depository for securities, or you otherwise hold shares of our common stock for the
         account of others as a nominee holder, you should promptly notify the beneficial owner of such shares as soon as possible to
         obtain instructions with respect to their subscription rights. If the beneficial owner so instructs, you should complete the
         appropriate subscription rights certificate and submit it, together with any other required documentation and payment in full
         for the Units subscribed for, to the subscription agent.

              If you are a beneficial owner of our common stock held by a nominee holder, such as a broker, dealer or bank, we will
         ask your broker, dealer, bank or other nominee to notify you of this rights offering. If you wish to purchase Units in this
         rights offering, you should promptly contact the nominee holder and ask him or her to effect transactions in accordance with
         your instructions.


         Ambiguities in Exercise of Subscription Rights

              If you do not specify the number of Units being subscribed for on your subscription rights certificate with respect to
         your basic subscription right or your over-subscription right, or if your payment is not sufficient to pay the total purchase
         price for all of the Units that you indicated you wished to purchase, you will be deemed to have subscribed for the maximum
         number of Units that could be subscribed for with the payment that the subscription agent receives from you. If the aggregate
         subscription price paid by you exceeds the amount necessary to purchase the number of Units which you have indicated an
         intention to purchase, then you will be deemed to have exercised your basic subscription rights or over-subscription rights,
         as the case may be, in full to the extent of the payment tendered to purchase that number of Units equal to the quotient
         obtained by dividing the payment tendered by the subscription price. Any remaining amount shall be returned to you by
         mail, without interest or deduction, as soon as practicable after the expiration of this rights offering and after all prorations
         and adjustments contemplated by the terms of this rights offering have been effected.


         Our Determinations will be Binding

              All questions concerning the timeliness, validity, form and eligibility of any exercise of subscription rights will be
         determined by us, and our determinations will be final and binding. In our sole discretion, we may waive any defect or
         irregularity, or permit a defect or irregularity to be corrected within such time as we may determine, or reject the purported
         exercise of any subscription right by reason of any defect or irregularity in any exercise. Subscriptions will not be deemed to
         have been received or accepted until all irregularities have been waived by us or cured within such time as we determine in
         our sole discretion. Neither we nor the subscription agent will be under any duty to notify you of any defect or irregularity in
         connection with the submission of a subscription rights certificate or incur any liability for failure to give you that notice.


         Shares of our Common Stock Issued and Outstanding after this Rights Offering

              As of August [ • ], 2010, we had issued and outstanding 8,703,330 shares of our common stock. Assuming we issue all
         of the Units offered in this rights offering, 17,406,660 shares of our common stock will be issued and outstanding after this
         rights offering. This would represent an increase of 100% in the number of issued and outstanding shares of our common
         stock. In addition, if we issue all of the Units offered in this rights offering, we will issue warrants to acquire
         8,703,330 shares of our common stock. If you do not fully exercise your subscription rights but others do, the percentage of
         our common stock that you hold will decrease.


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         No Fractional Shares

              We will not issue fractional shares. Fractional shares of common stock resulting from the exercise of the subscription
         rights will be eliminated by rounding up to the nearest whole share, with the total subscription payment being adjusted
         accordingly. Any excess subscription payments received by the subscription agent will be returned, without interest, as soon
         as practicable.


         Fees and Expenses

              We will pay all fees charged by the subscription agent. You are responsible for paying any other commissions, fees,
         taxes or other expenses incurred in connection with the exercise of your subscription rights, and neither we, the subscription
         agent nor the information agent will pay those expenses.


         Subscription Agent

               We have appointed Illinois Stock Transfer Co. as subscription agent for this rights offering.

              You can contact the subscription agent by mail or overnight courier at Illinois Stock Transfer Company, 209 West
         Jackson Boulevard, Suite 903, Chicago, Illinois 60606.

              You should deliver your subscription rights certificate, payment of the subscription price and notice of guaranteed
         delivery (if any) to the subscription agent. We will pay the fees and certain expenses of the subscription agent, which we
         estimate will total approximately $2,000. Under certain circumstances, we may indemnify the subscription agent from
         certain liabilities that may arise in connection with this rights offering.


         No Recommendations

              Neither we nor our board of directors are making any recommendation as to whether or not you should exercise your
         subscription rights. You should make your decision based on your own assessment of your best interests.


         Important

            DO NOT SEND SUBSCRIPTION RIGHTS CERTIFICATES DIRECTLY TO US. YOU ARE RESPONSIBLE
         FOR CHOOSING THE PAYMENT AND DELIVERY METHOD FOR YOUR SUBSCRIPTION RIGHTS
         CERTIFICATE, AND YOU BEAR THE RISKS ASSOCIATED WITH SUCH DELIVERY. IF YOU CHOOSE TO
         DELIVER YOUR SUBSCRIPTION RIGHTS CERTIFICATE AND PAYMENT BY MAIL, WE RECOMMEND
         THAT YOU USE REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. WE
         ALSO RECOMMEND THAT YOU ALLOW A SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY TO
         THE SUBSCRIPTION AGENT AND CLEARANCE OF PAYMENT PRIOR TO THE EXPIRATION TIME.


         Subscription Agent If You Have Questions

              Illinois Stock Transfer Co. will act as the subscription agent in connection with this rights offering. The subscription
         agent will receive for its administrative, processing, invoicing and other services a fee estimated to be approximately $2,000
         plus reimbursement for all reasonable out-of-pocket expenses related to this offering. The subscription agent does not make
         any recommendations as to whether or not you should exercise your subscription rights. We have also agreed to indemnify
         the subscription agent against certain liabilities that it may incur in connection with this offering.

              Completed subscription rights certificates must be sent with full payment of the subscription price for all shares
         subscribed for through the exercise of the subscription right to the subscription agent by one of the methods described below.

              We will accept only properly completed and duly executed subscription rights certificates actually received at any of
         the addresses listed below, at or prior to 5:00 p.m., New York City time, on the expiration date of this offering. In this
         prospectus, close of business means 5:00 p.m., New York City time, on the relevant date.
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         Subscription
         Rights
         Certificate
         Delivery
         Method                                                                                           Address/Number


         By Mail                                                                         209 West Jackson Boulevard, Suite 903
                                                                                         Chicago, Illinois 60606
                                                                                         (800) 757-5755
         By Hand/Overnight Carrier                                                       209 West Jackson Boulevard, Suite 903
                                                                                         Chicago, Illinois 60606
                                                                                         (800) 757-5755

              Delivery to an address other than the address listed above will not constitute valid delivery and, accordingly, may be
         rejected by us.


                                        MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

               The following summarizes the material federal income tax consequences to you as a U.S. stockholder of Mercantile
         Bancorp, Inc. and to us as a result of the receipt, lapse or exercise of the subscription rights distributed to you in this rights
         offering. This discussion does not address the tax consequences of the rights offering under applicable state, local or foreign
         tax laws. Moreover, this discussion does not address every aspect of taxation that may be relevant to a particular taxpayer
         under special circumstances or who is subject to special treatment under applicable law and is not intended to be applicable
         in all respects to all categories of investors. For example, this discussion does not address certain types of investors, such as
         insurance companies, tax-exempt persons, financial institutions, regulated investment companies, dealers in securities,
         persons who hold their shares of our common stock as part of a hedging, straddle, constructive sale or conversion
         transaction, persons whose functional currency is not the U.S. dollar and persons who are not treated as a U.S. stockholder.

               For purposes of this discussion, a U.S. stockholder is a holder of our common stock that is:

               • an individual who is a citizen or resident of the United States;

               • a corporation, partnership or other entity created in, or organized under the laws of, the United States or any state or
                 political subdivision thereof;

               • an estate the income of which is includable in gross income for U.S. federal income tax purposes regardless of its
                 source; or

               • a trust that either:

                    • the administration of which is subject to the primary supervision of a U.S. court and which has one or more
                      U.S. persons who have the authority to control all substantial decisions of the trust; or

                    • was in existence on August 20, 1996, was treated as a U.S. person on the previous day and elected to continue to
                      be so treated.

              This summary is based on the Code, the Treasury Regulations promulgated thereunder, judicial authority and current
         administrative rules and practice, any of which may subsequently be changed, possibly retroactively, or interpreted
         differently by the Internal Revenue Service, so as to result in U.S. federal income tax consequences different from those
         discussed below. The discussion that follows neither binds nor precludes the Internal Revenue Service from adopting a
         position contrary to that expressed herein, and we cannot assure you that such a contrary position could not be asserted
         successfully by the Internal Revenue Service or adopted by a court if the position were litigated. We have not obtained a
         ruling from the Internal Revenue Service with respect to the federal income tax consequences discussed below. This
         discussion assumes that the shares of our common stock you currently own and the subscription rights, shares of our
         common stock and warrants issued to you in this rights offering constitute capital assets within the meaning of Section 1221
         of the Code.
     Receipt and exercise of the subscription rights distributed in this rights offering is intended to be nontaxable to
stockholders, and the following summary assumes you will qualify for such nontaxable treatment. If, however, this rights
offering does not qualify as nontaxable, you would be treated as receiving a taxable distribution equal to the fair market
value of the subscription rights on their distribution date. The distribution would be taxed as a dividend to the extent made
out of our current or accumulated earnings and profits; any excess would be treated first as a

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         return of your basis (investment) in your stock and then as a capital gain. Expiration of the subscription rights would result in
         a capital loss.


         Taxation of Stockholders

              Receipt of subscription rights. You will not recognize any gain or other income upon your receipt of subscription
         rights in respect of your shares of our common stock. Your tax basis in each subscription right will effectively depend on
         whether you exercise the subscription right or allow the subscription right to expire. Except as provided in the following
         sentence, the basis of the subscription rights you receive as a distribution with respect to your shares of our common stock
         will be zero. If, however, either (i) the fair market value of the subscription rights on the date of issuance is 15% or more of
         the fair market value (on the date of issuance of the rights) of the shares of our common stock with respect to which they are
         received or (ii) you properly elect, in your federal income tax return for the taxable year in which the subscription rights are
         received, to allocate part of your basis in your shares of our common stock to the subscription rights, then upon exercise of
         the subscription rights, your basis in your shares of our common stock will be allocated between your shares of our common
         stock and your subscription rights in proportion to the fair market value of each on the date the subscription rights are issued.
         In addition, your holding period for a subscription right will include your holding period for the shares of our common stock
         with respect to which the subscription right is issued.

              Expiration of subscription rights. You should generally not recognize any loss upon the expiration of the subscription
         rights, as no basis will generally be allocated to such subscription rights, as described above. If basis is allocated to the
         subscription rights, if the subscription rights expire without exercise, and if you have previously disposed of the common
         stock with respect to which the subscription rights were received, you should consult your tax advisor regarding the ability to
         recognize a loss on the expiration of the subscription rights.

               Exercise of subscription rights. You generally will not recognize a gain or loss upon the exercise of a subscription
         right. The tax basis of any share of our common stock that you purchase upon exercise of the subscription rights will be
         equal to the portion of the basis of the subscription right, if any, as described above, allocated to the right to purchase the
         share, plus the portion of the subscription price allocated to the common stock. The tax basis of any warrant that you
         purchase upon exercise of the subscription rights will be equal to the portion of the basis of the subscription right, if any, as
         described above, allocated to the right to purchase the warrant, plus the portion of the subscription price allocated to the
         warrant. The portion of the subscription price allocated to the share of common stock and the portion of the subscription
         price allocated to the warrant will be determined for this purpose by allocating the subscription price for each Unit between
         the share of common stock and the warrant in proportion to their respective fair market values on the date the subscription
         rights are exercised. The holding period of the shares of our common stock and warrants purchased in this rights offering
         will begin on the date that you exercise your subscription rights.


         Taxation of the Company

              We will not recognize any gain, other income or loss upon the issuance of the subscription rights, the lapse of the
         subscription rights or the receipt of payment for shares of our common stock and warrants upon exercise of the subscription
         rights.

            THIS DISCUSSION IS INCLUDED FOR YOUR GENERAL INFORMATION ONLY. YOU SHOULD
         CONSULT YOUR TAX ADVISOR TO DETERMINE THE TAX CONSEQUENCES TO YOU OF THIS RIGHTS
         OFFERING IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES, INCLUDING ANY STATE, LOCAL AND
         FOREIGN TAX CONSEQUENCES.


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                                                          PLAN OF DISTRIBUTION

              On or about the date hereof, we will distribute the subscription rights, subscription rights certificates and copies of this
         prospectus to individuals who owned shares of common stock of record as of 5:00 p.m., New York City time, on [ • ], 2010,
         the record date for the rights offering. If you wish to exercise your subscription rights and purchase shares of common stock,
         you should complete the subscription rights certificate and return it with payment for the shares of our common stock, to the
         subscription agent, Illinois Stock Transfer Co. See ―The Rights Offering — Exercise of Subscription Rights.‖ If you have
         any questions, you should contact the subscription agent at (800) 757-5755.

              We have agreed to pay the subscription agent customary fees plus certain expenses in connection with the rights
         offering. Except as described in this section, we are not paying any other commissions, underwriting fees or discounts in
         connection with the rights offering. Some of our employees may solicit responses from you as a holder of subscription
         rights, but we will not pay our employees any commissions or compensation for these services other than their normal
         employment compensation. We estimate that our total expenses in connection with this rights offering will be approximately
         $262,000.

               Our board of directors agreed to pay McClendon, Morrison & Partners, Inc. a fee equal to 2% of the gross proceeds
         from the exercise of rights in this rights offering, subject to certain exceptions (including with respect to any proceeds from
         rights exercised by R. Dean Phillips or his related entities or affiliates), upon completion of this rights offering, and up to
         $75,000 in expenses. We have further agreed to indemnify McClendon, Morrison & Partners, Inc. and certain other parties
         affiliated or associated with McClendon, Morrison & Partners, Inc. against certain claims, liabilities and expenses related to
         or arising in connection with the rendering by McClendon, Morrison & Partners, Inc. of its services as described above.


                                                              LEGAL MATTERS

             The validity of the securities offered by this prospectus will be passed upon for us by Schmiedeskamp, Robertson,
         Neu & Mitchell LLP.


                                                                   EXPERTS

              The audited consolidated financial statements of Mercantile Bancorp, Inc. incorporated in this prospectus by reference
         from the company’s Annual Report on Form 10-K for the year ended December 31, 2009 have been audited by BKD LLP,
         an independent registered public accounting firm, as stated in their report dated April 7, 2010, which is incorporated by
         reference. Such audited consolidated financial statements have been so incorporated in reliance upon the reports of such firm
         given upon their authority as experts in accounting and auditing.


                                            WHERE YOU CAN FIND MORE INFORMATION

              We are a public company and file annual, quarterly and special reports, proxy statements and other information with the
         SEC. You may read and copy any document we file at the SEC’s Public Reference Room at 100 F Street, N.E.,
         Washington, D.C. 20549 on official business days during the hours of 10:00 am to 3:00 pm. Please call the SEC at
         1-800-SEC-0330 for more information about the operation of the Public Reference Room. Our SEC filings are also available
         to the public at the SEC’s website at http://www.sec.gov .

               This prospectus is only part of a Registration Statement on Form S-1 that we have filed with the SEC under the
         Securities Act with respect to the subscription rights, shares of common stock and warrants comprising the subscription
         rights, and shares of common stock underlying the warrants to be sold in this offering. This prospectus does not contain all
         the information included in the Registration Statement. For further information about us and the securities to be sold in this
         offering, please refer to the Registration Statements including its exhibits.


                                                                        39
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                                 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

              The SEC allows us to ―incorporate by reference‖ the information that we have filed with it, meaning we can disclose
         important information to you by referring you to those documents already on file with the SEC. The information
         incorporated by reference is considered to be part of this prospectus except for any information that is superseded by other
         information that is included in this prospectus.

               This filing incorporates by reference the following documents, which we have previously filed with the SEC:

               • Our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as filed on April 7, 2010 and as
                 amended by Form 10-K/A filed on April 30, 2010;

               • Our Quarterly Reports on Form 10-Q for the fiscal quarter ended March 31, 2010, as filed on May 17, 2010 and for
                 the fiscal quarter ended June 30, 2010, as filed on August 16, 2010;

               • Our definitive Proxy Statement used in connection with the Annual Meeting of Stockholder held on May 24, 2010,
                 as filed on May 7, 2010; and

               • Our Current Reports on Form 8-K, as filed on February 22, 2010, March 1, 2010, April 6, 2010, May 24, 2010,
                 May 27, 2010 and July 14, 2010.

              You should rely only on the information contained in this prospectus or that information to which this prospectus has
         referred you by reference. We have not authorized anyone to provide you with any additional information.

              These documents may also be accessed through our website at www.mercbanx.com or as described under ―Where You
         Can Find More Information.‖ The information and other content contained on or linked from our website are not part of this
         prospectus. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be
         deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein modifies
         or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or
         superseded, to constitute a part of this prospectus.

               We will provide, without charge, to each person, including any beneficial owner, to whom this prospectus is delivered,
         on the written or oral request of such person, a copy of any or all of the reports or documents incorporated by reference in
         this prospectus but not delivered with this prospectus. Any request may be made by writing or calling us at the following
         address or telephone number: Mercantile Bancorp, Inc., 200 North 33rd Street, Quincy, Illinois 62301, Attention: Corporate
         Secretary, (217) 223-7300.


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                                    PART II — INFORMATION NOT REQUIRED IN PROSPECTUS


         ITEM 13.      Other Expenses of Issuance and Distribution


         Registration Fee                                                                                                   $   3,446
         Printing and Engraving Expenses                                                                                       22,000
         Transfer Agent Fees                                                                                                    2,000
         Legal Fees and Expenses                                                                                              150,000
         Accounting Expenses                                                                                                   30,000
         NYSE Amex Listing Fee                                                                                                 45,000
         Miscellaneous                                                                                                         10,000
         Total                                                                                                              $ 262,446


         * Other than the Registration Fee, all expenses are estimated


         ITEM 14.      Indemnification of Directors and Officers

               The company’s Certificate of Incorporation provides that, to the fullest extent permitted by Section 145 of the Delaware
         Corporation Law, the company shall indemnify all directors, officers, employees, and agents and persons serving at the
         request of the company in any such capacity for another corporation or business against all expenses and liabilities as to
         actions in their official capacities and as to actions in all other capacities while holding such offices. Such indemnification
         shall continue to apply to former directors, officers, employees and agents and shall inure to the benefit of all indemnified
         persons’ heirs, executors and administrators. The indemnification rights under the Certificate are in addition to and not
         exclusive of any other rights of indemnification to which a person may be entitled.

               In addition, the Certificate provides that a director of the company shall not be personally liable to the company or its
         stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the
         director’s duty of loyalty to the company or its stockholders, (ii) for acts or omissions not in good faith or which involve
         intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or
         (iv) for any transaction from which the director derived any improper personal benefit. If the Delaware General Corporation
         Law is amended in the future to authorize broader elimination or limitation of liability for a director, then in addition to the
         foregoing elimination of liability, upon the effective date of such amendment the liability of a director shall without further
         act also be eliminated and limited to such broader extent to the fullest extent not prohibited by the Delaware General
         Corporation Law, as amended. The foregoing provisions shall be deemed to be a contract with each director of the company
         who serves as such at any time while such provisions are in effect, and each such director shall be deemed to be serving as
         such in reliance on these provisions. No repeal or amendment of the company’s Certificate of Incorporation shall adversely
         affect any right or any elimination or limitation of liability of a director existing at the time of the repeal or amendment.

              The company’s Bylaws provide the company shall indemnify any person who is a party to an action (including actions
         by or in the right of the company) by reason of the fact the person is or was a director or officer of the company or serving at
         the request of the company as a director or officer of another entity, against all expenses, judgments and other amount
         incurred if the person acted in good faith and in a manner he or she reasonably believed to be in the best interest of the
         company and, with respect to any criminal action, had no reasonable basis to believe his or her conduct was unlawful.
         However, with respect to an action by or in the right of the company, no indemnification shall be made with respect to any
         matter in which the person is adjudged to be liable for negligence or misconduct in the performance of his or her duty to the
         company unless and only to the extent the court determines that, despite the adjudication, the person is reasonably entitled to
         indemnification. Whether a person is entitled to such indemnification is generally determined by the board of directors. Such
         indemnification rights are not exclusive, and the company may provide further indemnification rights to directors, officers,
         employees and agents of the company or such persons acting in those capacities for another entity at the request of the
         company.


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              The company maintains director and officer liability insurance policies providing for the insurance on behalf of any
         person who is or was a director or officer of the company or a subsidiary for any claim made during the policy period against
         the person in any such capacity or arising out of the person’s status as such. The insurers’ limit of liability under the policies
         is $15 million for each insured loss and $15 million in the aggregate for all insured losses for the policy period, which is
         July 15, 2010 through July 15, 2011. Under certain circumstances, there is an additional $5 million of coverage.

             The policies contain various reporting requirements and exclusions, and the company is responsible for a $250,000
         deductible. Among the various standard industry exclusions from coverage, the insurer’ shall not be liable for loss on
         account of any claim brought or maintained by any individual or entity directly or beneficially owning ten percent (10%) or
         more of the outstanding securities or voting rights representing the present right to vote for election of directors of the parent
         organization.


         ITEM 15.      Recent Sales of Unregistered Securities

             The company has sold no securities within the past three years which were not registered under the Securities Act of
         1933, as amended.


         ITEM 16.      Exhibits and Financial Statement Schedules

              The exhibits listed on the Exhibit Index of this Registration Statement are filed herewith or incorporated herein by
         reference to other filings.


         ITEM 17.      Undertakings

               (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the ―Act‖) may be permitted to
         directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant
         has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public
         policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such
         liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of
         the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling
         person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter
         has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such
         indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
         adjudication of such issue.


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                                                                SIGNATURES

              Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to
         be signed on its behalf by the undersigned, thereunto duly authorized in the City of Quincy, State of Illinois, on August 20,
         2010.
                                                                       Mercantile Bancorp, Inc.




                                                                       By: /s/ Ted T. Awerkamp
                                                                           Name: Ted T. Awerkamp
                                                                           Title: President and Chief Executive Officer

              Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following
         persons in the capacities and on the dates indicated.

                                  Signature                                              Title                                Date


         /s/ Ted T. Awerkamp                                            President and Chief Executive Officer          August 20, 2010
         Ted T. Awerkamp                                                (principal executive officer); Director
         /s/ Michael P. McGrath                                          Executive Vice President, Treasurer,          August 20, 2010
         Michael P. McGrath                                             Secretary and Chief Financial Officer
                                                                         (principal financial officer/principal
                                                                                 accounting officer)
         *                                                                              Director                       August 20, 2010
         Michael J. Foster
         *                                                                             Director                        August 20, 2010
         William G. Keller, Jr.
         *                                                                             Director                        August 20, 2010
         Dennis M. Prock
         *                                                                             Director                        August 20, 2010
         James W. Tracy
         *                                                                             Director                        August 20, 2010
         Julie A. Brink
         *                                                                             Director                        August 20, 2010
         Alexander J. House
         *                                                                             Director                        August 20, 2010
         John R. Spake
         *                                                                             Director                        August 20, 2010
         Lee R. Keith

         *By: /s/ Michael P. McGrath
               Michael P. McGrath
               Attorney-in-fact


                                                                       II-3
Table of Contents



                                                              Exhibit Index


            Exhibit
            Numbe                                                      Description of
              r                                                           Exhibit


               1 .1*    Form of Dealer-Manager Agreement.
               3 .1     Certificate of Incorporation of Mercantile Bancorp, Inc., as amended, incorporated by reference to Exhibit
                        3.1 to the Registration Statement on Form 10 dated May 12, 2004 (File No. 000-50757) (the ―Form 10‖).
               3 .2     Certificate of Amendment to the Certificate of Incorporation of Mercantile Bancorp, Inc., incorporated by
                        reference to Exhibit 3.3 to the Annual Report on Form 10-K for the year ended December 31, 2008 (the
                        ―2008 Form 10-K‖).
               3 .3#    Certificate of Amendment to the Certificate of Incorporation of Mercantile Bancorp, Inc.
               3 .4     Bylaws of Mercantile Bancorp, Inc., as amended, incorporated by reference to Exhibit 3.1 to Form 10-Q for
                        the quarter ended June 30, 2009.
               4 .1     Form of Subscription Right Certificate
               4 .2     Form of Warrant
              5#        Opinion of Schmiedeskamp, Robertson, Neu & Mitchell LLP regarding legality of securities.
              8*        Opinion of DLA Piper LLP (US) regarding tax matters.
              10 .1†    Executive Employee Salary Continuation Agreement dated December 8, 1994 between Mercantile Trust &
                        Savings Bank and Dan S. Dugan, incorporated by reference to Exhibit 10.3 to the Form 10.
              10 .2†    Amendment to Dugan Executive Employee Salary Continuation Agreement dated April 26, 2004,
                        incorporated by reference to Exhibit 10.4 to the Form 10.
              10 .3†    Second Amendment to Dugan Executive Employee Salary Continuation Agreement dated December 29,
                        2006, incorporated by reference to Exhibit 10.1 to the Form 8-K filed January 5, 2007.
              10 .4†    Executive Employee Salary Continuation Agreement, as amended and restated effective January 1, 2009
                        between Mercantile Bank and Ted T. Awerkamp, incorporated by reference to Exhibit 10.4 to the 2008 Form
                        10-K.
              10 .5†    Employment Agreement dated January 1, 2008, between the Company and Ted T. Awerkamp, incorporated
                        by reference to Exhibit 10.8 to the Annual Report on Form 10-K for the year ended December 31, 2007 (the
                        ―2007 Form 10-K‖).
              10 .6†    Amendment to Employment Agreement dated July 15, 2008, between the Company and Ted T. Awerkamp,
                        incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2008 (the ―2008
                        Third Quarter Form 10-Q‖).
              10 .7†    Employment Agreement dated January 1, 2008, between the Company and Michael P. McGrath,
                        incorporated by reference to Exhibit 10.9 to the 2007 Form 10-K.
              10 .8†    Amendment to Employment Agreement dated July 15, 2008, between the Company and
                        Michael P. McGrath, incorporated by reference to Exhibit 10.2 to the 2008 Third Quarter Form 10-Q.
              10 .9†    Employment Agreement dated January 1, 2008, between the Company and Daniel J. Cook, incorporated by
                        reference to Exhibit 10.10 to the 2007 Form 10-K.
              10 .10†   Amendment to Employment Agreement dated July 15, 2008, between the Company and Daniel J. Cook,
                        incorporated by reference to Exhibit 10.3 to the 2008 Third Quarter Form 10-Q.
              10 .11    Mercantile Bancorp, Inc. Profit Sharing Plan and Trust, incorporated by reference to Exhibit 10.7 to the
                        Form 10.
              10 .12    401(k) Plan Adoption Agreement, incorporated by reference to Exhibit 10.8 to the Form 10.
              10 .13    Amendment to the Profit Sharing Plan and Trust, incorporated by reference to Exhibit 10.9 to the Form 10.
              10 .14    Consulting Agreement dated March 2, 2007 between Mercantile Bancorp, Inc. and Dan S. Dugan,
                        incorporated by reference to Exhibit 10.1 to the Form 8-K filed March 7, 2007.
              10 .15    Consulting Agreement dated January 15, 2008 between Mercantile Bancorp, Inc. and Dan S. Dugan,
                        incorporated by reference to Exhibit 10.16 to the 2007 Form 10-K.
              10 .16    Consulting Agreement dated March 1, 2009 between Mercantile Bancorp, Inc. and Dan S. Dugan,
                        incorporated by reference to Exhibit 10.16 to the 2008 Form 10-K.
Table of Contents




            Exhibit
            Numbe                                                      Description of
              r                                                           Exhibit


              10 .17   Third Amended and Restated Term Loan Agreement dated November 10, 2006 by and between Mercantile
                       Bancorp, Inc., Borrower, and U.S. Bank National Association, formerly known as Firstar Bank, N.A., Lender,
                       incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2006 (the ―2006
                       Third Quarter Form 10-Q‖).
              10 .18   First Amendment to Third Amended and Restated Loan Agreement between Mercantile Bancorp, Inc. and
                       U.S. Bank National Association, dated March 20, 2007, incorporated by reference to Exhibit 10.1 to Form 8-K
                       filed March 24, 2007.
              10 .19   Second Amendment to Third Amended and Restated Loan Agreement between Mercantile Bancorp, Inc. and
                       U.S. Bank National Association, dated as of June 30, 2007, incorporated by reference to Exhibit 10.1 to Form
                       8-K filed July 19, 2007.
              10 .20   Third Amendment to Third Amended and Restated Loan Agreement between Mercantile Bancorp, Inc. and
                       U.S. Bank National Association, dated September 7, 2007, incorporated by reference to Exhibit 10.1 to Form
                       8-K filed September 12, 2007.
              10 .21   Assignment Agreement among U.S. Bank National Association, Great River Bancshares, Inc. and Mercantile
                       Bancorp, Inc., dated December 23, 2008, incorporated by reference to Exhibit 10.21 to the 2008 Form 10-K.
              10 .22   Secured Demand Promissory Note made by Mercantile Bancorp, Inc. to Great River Bancshares, Inc., dated
                       December 31, 2008, incorporated by reference to Exhibit 10.22 to the 2008 Form 10-K.
              10 .23   Secured Demand Promissory Note made by Mercantile Bancorp, Inc. to Great River Bancshares, Inc., dated
                       February 5, 2009, incorporated by reference to Exhibit 10.23 to the 2008 Form 10-K.
              10 .24   Fourth Amended and Restated Loan Agreement by and between Mercantile Bancorp, Inc. and Great River
                       Bancshares, Inc., dated April 30, 2009, incorporated by reference to Exhibit 99.1 to Form 8-K filed May 6,
                       2009.
              10 .25   Waiver and Agreement by and between Mercantile Bancorp, Inc., and Great River Bancshares, Inc., dated
                       March 13, 2009, regarding certain loan covenants of the Company, incorporated by reference to Exhibit 10.24
                       to the 2008 Form 10-K.
              10 .26   First Amendment to Waiver and Agreement by and between Mercantile Bancorp, Inc. and Great River
                       Bancshares, Inc., dated March 13, 2009, incorporated by reference to Exhibit 99.2 to Form 8-K filed May 6,
                       2009.
              10 .27   Fourth Amended and Restated Loan Agreement Waiver and Amendment dated August 10, 2009, incorporated
                       by reference to Exhibit 10.5 to the Form 10-Q for the quarter ended June 30, 2009 (the ―2009 Second Quarter
                       10-Q‖).
              10 .28   Stock Purchase Agreement dated as of November 22, 2009 by and between Mercantile Bancorp, Inc. and
                       United Community Bancorp, Inc., incorporated by reference to Exhibit 10.1 to Form 8-K filed on November
                       25, 2009 (the ―November 2009 Form 8-K‖).
              10 .29   Second Waiver and Amendment dated November 21, 2009 by and between Mercantile Bancorp, Inc. and
                       Great River Bancshares, Inc., incorporated by reference to Exhibit 10.3 to the November 2009 Form 8-K.
              10 .30   Exchange Agreement dated as of November 21, 2009 by and between Mercantile Bancorp, Inc. and R. Dean
                       Phillips, incorporated by reference to Exhibit 10.2 to the November 2009 Form 8-K.
              10 .31   Construction Agreement dated August 24, 2006 by and between Mercantile Trust & Savings Bank, Owner,
                       and Clayco, Inc., Contractor, incorporated by reference to Exhibit 10.2 to the 2006 Third Quarter Form 10-Q.
              10 .32   General Conditions of the Contract for Construction by and between Mercantile Trust & Savings Bank,
                       Owner, and Clayco, Inc., Contractor, incorporated by reference to Exhibit 10.3 to the 2006 Third Quarter
                       Form 10-Q.
              10 .33   Indenture dated August 25, 2005 between Mercantile Bancorp, Inc. and Wilmington Trust Company, as
                       trustee, incorporated by reference to Exhibit 10.1 to the 2009 Second Quarter Form 10-Q.
              10 .34   Junior Subordinated Indenture dated July 13, 2006 between Mercantile Bancorp, Inc. and Wilmington Trust
                       Company, as trustee, incorporated by reference to Exhibit 10.2 to the 2009 Second Quarter Form 10-Q.
              10 .35   Indenture dated July 13, 2006 (Fixed/Floating Rate Junior Subordinated Debt Securities Due 2036) between
                       Mercantile Bancorp, Inc. and Wilmington Trust Company, as trustee, incorporated by reference to Exhibit
                       10.3 to the 2009 Second Quarter Form 10-Q.
Table of Contents




             Exhibit
             Numbe                                                           Description of
               r                                                                Exhibit


               10 .36     Junior Subordinated Indenture dated August 30, 2007 between Mercantile Bancorp, Inc. and Wilmington
                          Trust Company, as trustee, incorporated by reference to Exhibit 10.4 to the 2009 Second Quarter Form
                          10-Q.
               10 .37†    Mercantile Bancorp, Inc. Company and Bank Executive and Senior Officer Incentive Compensation Plan
                          December 2006, amended and restated as of January 1, 2010, incorporated by reference to the Annual
                          Report on Form 10-K for the year ended December 31, 2009 (the ―2009 10-K‖).
               21         Subsidiaries of registrant, incorporated by reference to Exhibit 21 to the 2009 10-K
               23 .1*     Consent of BKD LLP
               23 .2#     Consent of Schmiedeskamp, Robertson, Neu & Mitchell LLP (included in Exhibit 5)
              24#         Power of Attorney (included on page II-3 of this Registration Statement as previously filed.)
               99 .1#     Form of Instructions for Use of Subscription Rights Certificate
               99 .2#     Notice of Guaranteed Delivery for Subscription Rights Certificate
               99 .3#     Form of Letter to Stockholders
               99 .4#     Form of Letter to Dealers, Banks, Trust Companies and Other Nominees
               99 .5#     Form of Letter to Clients
               99 .6#     Form of Nominee Holder Certification
               99 .7#     Beneficial Owner Election Form


         # Previously filed.

         * Filed herewith.

         † Management contract or compensatory plan or arrangement.

            To be filed as an exhibit to a current or periodic report that the registrant files and incorporates by reference or by
            post-effective amendment.
                                                                                                                                      Exhibit 1.1


                                                      MERCANTILE BANCORP, INC.
                                                    DEALER-MANAGER AGREEMENT
                                                                             , 2010
McClendon Morrison & Partners, Inc.
As Dealer-Manager,
150 North Michigan, Suite 2800
Chicago, Illinois 60601
Ladies and Gentlemen:
    The following will confirm our agreement relating to the proposed rights offering (the ― Rights Offering ‖) to be undertaken by Mercantile
Bancorp, Inc., a Delaware corporation (the ― Company ‖), pursuant to which the Company will distribute to the holders of record of its
common stock, par value $0.4167 per share (the ― Common Stock ‖), subscription rights (the ― Rights ‖), as set forth in the Company’s
Registration Statement on Form S-1 (Registration No. 333-168075) filed with the Securities and Exchange Commission (the ― Commission ‖)
on July 12, 2010, to subscribe for and purchase a unit (the ― Units ‖), each consisting of one share of the Common Stock (the ― Rights Shares
‖) and a warrant to purchase one share of the Common Stock (the ― Rights Warrants ‖) for each share of Common Stock held by such holders
of record, at a subscription price equal to $              per Unit in cash (the ― Subscription Price ‖). The Rights Warrants will be exercisable
until               , 2015 at an exercise price of $             per share of the Common Stock, subject to the Company’s right to redeem the
Rights Warrants any time after the second anniversary of the distribution date if the price of the Common Stock exceeds 150% of the exercise
price of the Rights Warrant for 60 consecutive days.
1. The Rights Offering .
   (a) The Company proposes to undertake the Rights Offering pursuant to which each holder of Common Stock shall receive one Right for
each share of Common Stock held of record at the close of business on                   , 2010 (the ― Record Date ‖). Holders of Rights will be
entitled to subscribe for and purchase, at the Subscription Price, one Unit consisting of one Rights Share and one Rights Warrant for every
Right granted to such holder on the Record Date (the ― Basic Subscription Right ‖).
   (b) The Rights will not be transferable and will not be listed for trading on the NYSE Amex or any other stock exchange or trading market
or quoted on the OTC Bulletin Board. The Rights Shares, but not the Rights Warrants, are expected to be traded on the NYSE Amex and shall
be transferable in accordance with, applicable securities rules and regulations. The shares of Common Stock issuable upon exercise of the
Rights Warrants (the ― Underlying Shares ‖) are expected to be traded on the NYSE and shall be transferable in accordance with applicable
securities rules and regulations.
   (c) Any holder of Rights who fully exercises all Basic Subscription Rights issued to such holder is entitled to subscribe for Units which
were not otherwise subscribed for by others pursuant to their Basic Subscription Rights (the ― Over-Subscription Right ‖). The
Over-Subscription Right shall allow a holder of a Right to subscribe for an additional amount, provided no Over-Subscription Right will be
honored if, when aggregated with such holder’s existing ownership, the Rights Shares and Rights Warrants acquired with the Rights Offering
would result in such person or entity, together with any related persons or entities, owning in excess of 9.9% of the Company’s issued and
outstanding shares of Common Stock (on a fully diluted basis) following the closing of the transactions contemplated by the Rights Offering.
Rights Shares and Rights Warrants acquired pursuant to the Over-Subscription Right are subject to allotment, as more fully discussed in the
Prospectus (as defined herein).
   (d) The Rights will expire at 5:00 p.m., New York City time, on                 , 2010 (the ― Expiration Date ‖). The Company shall have the
right to extend the Expiration Date in its sole discretion.
   (e) All funds from the exercise of Basic Subscription Rights will be deposited with Illinois Stock Transfer Co., as the subscription agent (the
― Subscription Agent ‖) and held in a segregated account with the Subscription Agent pending notification by the Company that the
subscriptions have been accepted. There is no minimum number of Basic Subscription Rights and the Company may accept the funds deposited
with respect to Basic Subscription Rights at any time or from time to time prior to the Expiration Date. All funds from the exercise of the
Over-Subscription Rights will be deposited with Subscription Agent and held in a segregated account (which may be the same account as used
for the funds deposited with respect to Basic Subscription Rights) pending a final determination of the number of Rights Shares and Rights
Warrants to be issued pursuant to the exercise of Over-Subscription Rights. As soon as is practicable, the Company shall conduct a final
closing of the Rights Offering (the ― Final Closing ‖).
2. Appointment as Dealer-Manager; Role of Dealer-Manager . The Company hereby engages McClendon Morrison & Partners, Inc. (― MMP ‖)
as the sole exclusive dealer-manager (the ― Dealer-Manager ‖) in connection with the Rights Offering, and authorizes the Dealer-Manager to
act as such on its behalf in connection with the Rights Offering, in accordance with this Dealer-Manager Agreement (this ― Agreement ‖).
During the term set forth in the engagement letter agreement entered into between the Company and the Dealer-Manager, dated July 17, 2009
(the ― Engagement Letter ‖), the Company will not solicit, negotiate with or enter into any agreement with any other placement agent, financial
advisor, dealer manager, brokers, dealers or underwriters or any other person or entity in connection with the Rights Offering. On the basis of
the representations and warranties and agreements of the Company contained in this Agreement and subject to and in accordance with the
terms and conditions hereof, the Dealer-Manager agrees that as Dealer-Manager it will, in accordance with its customary practice and to the
extent requested by the Company, use its commercially reasonable efforts to (a) advise and assist the Company in soliciting the exercise of
Rights held by Rights Holders for subscriptions for Rights Shares and Rights Warrants, (b) provide Advisory Services (as defined below) in
connection with the Rights Shares and Rights Warrants not subscribed for by the holders of Rights, and (c) provide Advisory Services (as
defined below) in connection with the Rights Offering. For purposes of this Agreement, the term ― Advisory Services ‖ means: (i) advising on
pricing, structuring and other terms and conditions of the Rights Offering, including oversubscription rights and limits, and (ii) providing
guidance on general market conditions and their impact on the Rights Offering. For the avoidance of doubt and notwithstanding anything that
may be to the contrary in this Agreement, the Company and the Dealer-Manager hereby agree that the Dealer-Manager will not underwrite the
Rights Offering and the Dealer-Manager has no obligation to purchase or procure purchases of the Rights Shares and the Rights Warrants
offered in connection with the Rights Offering.
3. No Liability for Acts of Brokers, Dealers, Banks and Trust Companies . The Dealer-Manager shall not be subject to any liability to the
Company or any of the Company’s Subsidiaries (as defined below) or ―affiliates‖ (― Affiliates ‖, as such term is defined in Rule 144 under the
Securities Act of 1933, as amended (the ― Securities Act ‖)) for any act or omission on the part of any broker or dealer in securities (other than
the Dealer-Manager) or any bank or trust company or any other natural person, partnership, limited liability partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated association, joint venture, or other entity or organization (each, a ―
Person ‖) and the Dealer-Manager shall not be liable for its own acts or omissions in performing its obligations as advisor or Dealer-Manager
hereunder or otherwise in connection with the Rights Offering or the related transactions, except for any losses, claims, damages, liabilities and
expenses determined in a final judgment by a court of competent jurisdiction to have resulted primarily from any such acts or omissions
undertaken or omitted to be taken by the Dealer-Manager through its gross negligence, bad faith or willful misconduct. In soliciting or
obtaining exercises of Rights, the Dealer-Manager shall not be deemed to be acting as the agent of the Company or as the agent of any broker,
dealer, bank or trust company, and no broker, dealer, bank or trust company shall be deemed to be acting as the Dealer-Manager’s agent or as
the agent of the Company. As used herein, the term ― Subsidiary ‖ means a Subsidiary of the Company as defined in Rule 405 of the Securities
Act. Unless the context specifically requires otherwise, the term ― Company ‖ as used in this Agreement means the Company and its
Subsidiaries collectively on a consolidated basis.

                                                                          2
4. The Offer Documents .
   (a) There will be used in connection with the Rights Offering certain materials in addition to the Registration Statement, any Preliminary
Prospectus or the Prospectus (each as defined herein), including: (i) all exhibits to the Registration Statement which pertain to the conduct of
the Rights Offering and (ii) any soliciting materials relating to the Rights Offering approved by the Company (collectively with the Registration
Statement, any Preliminary Prospectus and the Prospectus, the ― Offer Documents ‖). The Dealer-Manager has been given an opportunity to
review and comment upon the Offer Documents.
   (b) The Company agrees to furnish the Dealer-Manager with as many copies as it may reasonably request of the final forms of the Offer
Documents, and the Dealer-Manager is authorized to use copies of the Offer Documents in connection with its acting as Dealer-Manager. The
Dealer-Manager hereby agrees that it will not disseminate any written material for or in connection with the solicitation of exercises of Rights
pursuant to the Rights Offering other than the Offer Documents.
   (c) The Company represents and agrees that no solicitation material, other than the Offer Documents and the documents to be filed
therewith as exhibits thereto (each in the form of which has been approved by the Dealer-Manager), will be used in connection with the Rights
Offering by or on behalf of the Company without the prior approval of the Dealer-Manager, which approval will not be unreasonably delayed
or withheld. If the Company uses or permits the use of any such solicitation material in connection with the Rights Offering without the
Dealer-Manager’s approval, then the Dealer-Manager shall be entitled to withdraw as Dealer-Manager in connection with the Rights Offering
and the related transactions without any liability or penalty to the Dealer-Manager or any other Person identified in Section 11 hereof as a DM
Indemnified Party, and the Dealer-Manager shall be entitled to receive the payment of all fees payable under this Agreement or the
Engagement Letter which have accrued to the date of such withdrawal or which otherwise thereafter become payable.
5. Representations and Warranties . The Company represents and warrants to the Dealer-Manager that:
    (a) The Registration Statement on Form S-1, as amended (Registration No. 333-168075), with respect to the Rights, the Rights Shares, the
Rights Warrants and the Underlying Shares has: (i) been prepared by the Company in conformity with the requirements of the Securities Act in
all material respects, (ii) been filed with the Commission under the Securities Act and (iii) been declared effective by the Commission under
the Securities Act. Copies of such Registration Statement as amended to date have been delivered or made available by the Company to the
Dealer-Manager. For purposes of this Agreement, ― Effective Time ‖ means the date and the time as of which the Registration Statement, or the
most recent post-effective amendment thereto, if any, was declared effective by the Commission; ― Effective Date ‖ means the date of the
Effective Time; ― Preliminary Prospectus ‖ means each prospectus included in the Registration Statement before it becomes effective under
the Securities Act and any prospectus filed with the Commission by the Company with the consent of the Dealer-Manager pursuant to Rule
424(a) of the Securities Act; ― Registration Statement ‖ means such Registration Statement, as amended at the Effective Time, including any
documents which are exhibits thereto; and ― Prospectus ‖ means such final prospectus, as first filed with the Commission pursuant to Rule
424(b) of the Securities Act. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus. All references in this Agreement to the Registration Statement, a Preliminary Prospectus, and the Prospectus, or any amendments
or supplements to any of the foregoing shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System (― EDGAR ‖). The Prospectus delivered to the Dealer-Manager for use in connection with the Rights
Offering will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR.
   (b) The Registration Statement conformed, as of the Effective Time, in all material respects to the requirements of the Securities Act and did
not, as of the Effective Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were made not misleading; and the Prospectus and
any further amendments or supplements to the Registration Statement conforms or will conform, as of their respective dates or when they are
declared effective by the Commission, as the case may be, in each case, in all material respects to the requirements of the Securities Act and
collectively do

                                                                         3
not and will not, as of the applicable date thereof or when declared effective by the Commission, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (with
respect to the Prospectus, in the light of the circumstances under which they were made) not misleading; provided that no representation or
warranty is made by the Company as to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written information regarding the Dealer-Manager furnished to the Company by the Dealer-Manager or on its behalf by
Affiliates or representatives of the Dealer-Manager specifically for inclusion therein (collectively, the ― Dealer-Manager Information ‖) and in
its final form as approved by the Dealer-Manager and its counsel.
   (c) There are no contracts, agreements, plans or other documents which are required to be described in the Prospectus or filed as exhibits to
the Registration Statement by the Securities Act which have not been described in the Prospectus or filed as exhibits to the Registration
Statement or referred to in, or incorporated by reference into, the exhibit table of the Registration Statement as permitted by the Securities Act.
    (d) The Company and each of its Subsidiaries have been duly incorporated and are validly existing as corporations in good standing under
the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such
qualification, and have all corporate power and authority necessary to own or hold their respective properties and to conduct their businesses as
described in the Registration Statement and the Prospectus, except where the absence of such power or authority (either individually and in the
aggregate) would not have a material adverse effect on: (i) the business, condition (financial or otherwise), results of operations, material
properties or prospects (as such prospects are disclosed or described in the Prospectus) of the Company and its Subsidiaries, taken as a whole;
or (ii) the Rights Offering or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the
Prospectus (any such effect being a ― Material Adverse Effect ‖).
   (e) This Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and
delivery by the Dealer-Manager, constitutes the valid and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or affecting creditors’ rights generally and by general principles of equity.
    (f) Neither the Company nor any of its Subsidiaries: (i) is in violation of its charter or by-laws, (ii) in default under or in breach of, and no
event has occurred which, with notice or lapse of time or both, would constitute a default or breach under or result in the creation or imposition
of any lien, charge, mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction
of any kind whatsoever (each, a ― Lien ‖) upon any of their property or assets pursuant to, any material contract, agreement, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which the Company or its properties or
assets are subject or (iii) is in violation in any respect of any law, rule, regulation, ordinance, directive, judgment, decree or order, foreign and
domestic, to which Company or its Subsidiaries or any of their respective properties or assets is subject, except, in the case of clauses (ii) and
(iii) above, any violation or default that would not have a Material Adverse Effect.
   (g) Prior to or on the date hereof: (i) the Company and Subscription Agent have or will have entered into a subscription agency agreement
(the ― Subscription Agency Agreement ‖) if required by the Subscription Agent and (ii) the Company and Morrow & Company, LLC (the ―
Information Agent ‖) shall have entered into an information agency agreement (the ― Information Agency Agreement ‖) if required by the
Information Agent. When executed by the Company, if applicable, the Subscription Agency Agreement and the Information Agency
Agreement will have been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery
by the Subscription Agent and the Information Agent, as the case may be, will constitute a valid and legally binding agreement of the Company
enforceable in accordance with its terms, except as the enforceability thereof may be limited by

                                                                          4
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors’ rights generally and by general principles
of equity.
   (h) The Rights to be issued and distributed by the Company have been duly and validly authorized and, when issued and delivered in
accordance with the terms of the Offer Documents, will be duly and validly issued, and will constitute valid and legally binding obligations of
the Company enforceable against the Company in accordance with their terms; no holder of the Rights is or will be subject to personal liability
by reason of being such a holder; and the Rights will conform in all material respects to the description thereof contained in the Registration
Statement and the Prospectus. The Underlying Shares have been duly and validly authorized and, when issued and delivered in accordance with
the terms of the Rights Warrants, will be duly and validly issued, fully paid and non-assessable; no holder of the Underlying Shares will be
subject to personal liability by reason of being such a holder, and the Common Stock constituting the Underlying Shares conforms in all
material respects to the description thereof contained in the Registration Statement and the Prospectus.
   (i) The Rights Shares and the Rights Warrants have been duly and validly authorized and reserved for issuance upon exercise of the Rights
and are free of statutory and contractual preemptive rights and are sufficient in number to meet the exercise requirements of the Rights
Offering; and the Rights Shares and Rights Warrants, when so issued and delivered against payment therefor in accordance with the terms of
the Rights Offering, will be duly and validly issued, fully paid and non-assessable, with no personal liability attaching to the ownership thereof.
The Rights Shares and the Rights Warrants will conform in all material respects to the descriptions thereof contained in the Prospectus.
   (j) The Common Stock is listed on the NYSE Amex and the Company has made application to have the Rights Shares listed thereon. The
Company does not intend to list the Rights Warrants on the NYSE Amex or any other trading exchange. The Company has not received an oral
or written notification from the NYSE Amex authorities or any court or any other federal, state, local or foreign governmental or regulatory
authority having jurisdiction over the Company or any of its Subsidiaries or any of their properties or assets (― Governmental Authority ‖) of
any inquiry or investigation or other action that would cause the Rights Shares not be to be listed on the NYSE Amex.
   (k) Prior to the consummation of the Rights Offering, the Company will have an authorized capitalization as set forth under the caption ―
Capitalization ‖ in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and have been issued in compliance with federal and state securities laws. None of the outstanding
shares of Company capital stock were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for
or purchase securities of the Company. The Registration Statement accurately describes any authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries and any stock option, stock bonus and other stock plans or arrangements, and
the options or other rights granted thereunder. The Registration Statement and the Prospectus accurately and fairly presents in all material
respects the information required to be shown with respect to such plans, arrangements, options and rights.
   (l) The Company has obtained the requisite shareholder approval it needed to increase its authorized shares and to approve articles of
amendment of the Company’s Certificate of Incorporation increasing its authorized shares of Common Stock from 14 million to 30 million (the
― Charter Amendment ‖). The Charter Amendment has been duly authorized, executed and filed by the Company with the Secretary of State of
the State of Delaware and has become effective under Delaware law in accordance with its terms.
   (m) The Company owns or leases all such assets or properties as are necessary and material to the conduct of its business as presently
operated. The Company has good and marketable title in fee simple to all material assets, real property and personal property owned by it, in
each case free and clear of any Lien, except for such Liens as are described in the Registration Statement and the Prospectus, as do not
materially diminish the value of such property or materially interfere with the Company’s use thereof or

                                                                          5
would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Any assets or real property and
buildings held under lease or sublease by the Company is held under valid, subsisting and enforceable leases with such exceptions as are not
material to, and do not materially interfere with, the use of such property by the Company, in each case except as described in the Registration
Statement and the Prospectus or would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Neither
the Company nor any Subsidiary has received any notice of any claim adverse to its ownership of any real or personal property or of any claim
against the continued possession of any real property, whether owned or held under lease or sublease by the Company or any Subsidiary other
than which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
    (n) The Company and its Subsidiaries have all material consents, approvals, authorizations, orders, registrations, qualifications, licenses,
filings and permits of, with and from all judicial, regulatory and other Governmental Authorities and all third parties, foreign and domestic
(collectively, the ― Consents ‖), to own, lease and operate their properties and conduct their businesses as presently being conducted, and each
such Consent is valid and in full force and effect, except where the failure to have such Consent would not reasonably be expected to have a
Material Adverse Effect. The Company has not received notice of any investigation or proceedings which results in or, if decided adversely to
the Company, would reasonably be expected to result in, the revocation or modification of any Consent that would have a Material Adverse
Effect.
    (o) The execution, delivery and performance of this Agreement by the Company, the issuance of the Rights in accordance with the terms of
the Offer Documents, the issuance of Rights Shares and the Rights Warrants in accordance with the terms of the Rights Offering, and the
consummation by the Company of the transactions contemplated hereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Subsidiaries or any of its Affiliates is a party or by which the Company or any of its Subsidiaries is bound or
to which any of the properties or assets of the Company or any of its Subsidiaries is subject, except where such conflict, breach, violation or
default would not cause or constitute a Material Adverse Effect, nor will such actions result in any violation of the provisions of the charter or
by-laws of the Company or any of its Subsidiaries or any statute or any order, rule or regulation of any Governmental Authority (except, in the
case of any such statute, order, rule or regulation, where such violation would not cause a Material Adverse Effect); and except for the
registration of the Rights, the Rights Shares, the Rights Warrants and the Underlying Shares under the Securities Act, the listing of the Rights
Shares and Underlying Shares on the NYSE Amex, and such consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in connection with the distribution of the Rights and the sale and issuance
of the Rights Shares, the Rights Warrants and the Underlying Shares by the Company, no consent, approval, authorization or order of, or filing
or registration with, any such court or Governmental Authority is required for the execution, delivery and performance of this Agreement by
the Company and the consummation by it of the transactions contemplated hereby.
    (p) There are no contracts, agreements or understandings between the Company and any Person granting such Person the right to require the
Company to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such
Person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed by the Company under the Securities Act. No holder of any security
of the Company has any rights of rescission or similar rights with respect to such securities held by them.
   (q) Neither the Company nor any of its Subsidiaries has sustained, since the date of the latest balance sheet included in the Prospectus or
after such date and as disclosed in the Prospectus, any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree; and, since such date
or after such date and as disclosed in the Prospectus, there has not been any material change in the capital stock or long-term debt of the
Company or any of its Subsidiaries or any Material Adverse

                                                                         6
Effect. Since the date of the latest balance sheet presented in the Prospectus, the Company has not incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including any
acquisition or disposition of any business or asset, which would reasonably be expected to have a Material Adverse Effect, except for liabilities,
obligations and transactions which are disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus.
   (r) BKD, LLP, whose reports relating to the Company are included in the Registration Statement, are independent public accountants as
required by the Securities Act, the Exchange Act and the rules and regulations promulgated by the Public Company Accounting Oversight
Board (the ― PCAOB ‖). BKD, LLP, to the best of the Company’s knowledge, is duly registered and in good standing with the PCAOB. BKD,
LLP has not, during the periods covered by the financial statements included in the Registration Statement, the Preliminary Prospectus and the
Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
    (s) The financial statements, including the notes thereto, and any supporting schedules included in the Registration Statement, any
Preliminary Prospectus and the Prospectus present fairly, in all material respects, the financial position as of the dates indicated and the cash
flows and results of operations for the periods specified of the Company. Except as otherwise stated in the Registration Statement, any
Preliminary Prospectus and the Prospectus, said financial statements have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis throughout the periods involved. Any supporting schedules included in the Registration
Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the information required to be stated therein.
No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement.
The other financial and statistical information included in the Registration Statement, any Preliminary Prospectus and the Prospectus present
fairly, in all material respects, the information included therein and have been prepared on a basis consistent with that of the financial
statements that are included in the Registration Statement, such Preliminary Prospectus and the Prospectus and the books and records of the
respective entities presented therein.
    (t) There are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement, any
Preliminary Prospectus and the Prospectus in accordance with Regulation S-X under the Securities Act which have not been included as so
required. The pro forma and/or as adjusted financial information included in the Registration Statement, any Preliminary Prospectus and the
Prospectus has been properly compiled and prepared in accordance with the applicable requirements of the Securities Act in all material
respects and include all adjustments necessary to present fairly, in all material respects, in accordance with generally accepted accounting
principles the pro forma and as adjusted financial position of the respective entity or entities presented therein at the respective dates indicated
and their cash flows and the results of operations for the respective periods specified. The assumptions used in preparing the pro forma and as
adjusted financial information included in the Registration Statement, any Preliminary Prospectus and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable to the transactions or events described therein. The related pro forma and pro
forma as adjusted adjustments give appropriate effect to those assumptions; and the pro forma and pro forma as adjusted financial information
reflect the proper application of those adjustments to the corresponding historical financial statement amounts.
    (u) The Company maintains a system of internal accounting and other controls sufficient to provide reasonable assurances that:
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United States generally accepted accounting principles and to maintain
accountability for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the
recorded accounting for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any
differences.
   (v) Except as disclosed in the Registration Statement and Preliminary Prospectus and the Prospectus, there (i) are no significant deficiencies
or material weaknesses in the design or operation of

                                                                          7
internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize
and report financial information; or (ii) is not any fraud, whether or not material, that involves management or other employees who have a
significant role in the Company’s internal control over financial reporting.
   (w) The Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended (― Sarbanes Oxley ‖)
applicable to the Company, and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated by
any other Governmental Authority or self regulatory entity or agency, except for violations which, singly or in the aggregate, are disclosed in
the Prospectus or would not have a Material Adverse Effect.
   (x) To the Company’s knowledge, no relationship, direct or indirect, exists between or among any of the Company or any of its
Subsidiaries, on the one hand, and any director, officer, shareholder, customer or supplier of the Company or its Subsidiaries, on the other
hand, which is required by the Securities Act or the Exchange Act to be described in the Registration Statement or the Prospectus which is not
so described as required. Except as disclosed in the Registration Statement and the Prospectus, there are no outstanding loans (other than those
extended on an arms-length basis and permitted under the Sarbanes Oxley for depositary institutions), advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit of any of the officers
or directors of the Company or any of their respective family members. The Company has not, in violation of Sarbanes Oxley, directly or
indirectly, including through any Affiliate of the Company (other than as permitted under the Sarbanes Oxley for depositary institutions),
extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for
any director or executive officer of the Company.
   (y) There are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any
property or asset of the Company or any of its Subsidiaries is the subject which, if determined adversely to the Company or any of its
Subsidiaries, are reasonably likely to have a Material Adverse Effect; and to the Company’s knowledge, no such proceedings are threatened or
contemplated by Governmental Authorities or threatened by others.
   (z) The Company and its Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all
taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them,
except where the failure to make such filings or make such payments, either individually or in the aggregate, would not have, a Material
Adverse Effect..
    (aa) Each of the Company and its Subsidiaries maintains insurance of the types and in the amounts which the Company believes to be
reasonable and sufficient for a company of its size operating in the Company’s industry. There are no material claims by the Company or any
of its Subsidiaries under any policy or instrument described in this paragraph as to which any insurance company is denying liability or
defending under a reservation of rights clause. All of the insurance policies described in this paragraph are in full force and effect in all material
respects. Neither the Company nor any of its Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has
no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
   (bb) The Company and its Subsidiaries own or possess or have the right to use on reasonable terms all material patents, patent rights, patent
applications, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks, trade names, service names and other intellectual property
(collectively, ― Intellectual Property ‖) reasonably necessary to carry on their respective businesses as described in the Registration Statement
and the Prospectus. The expected expiration of any of such Intellectual Property rights would not result in a Material Adverse Effect. Neither
the Company nor any of

                                                                          8
its Subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to
any Intellectual Property.
    (cc) Neither the Company nor, to the Company’s knowledge, any of the Company’s directors, officers or employees has violated: (i) the
Bank Secrecy Act, as amended, (ii) the Money Laundering Control Act of 1986, as amended, (iii) the Foreign Corrupt Practices Act, or (iv) the
Righting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT)
Act of 2001, and/or the rules and regulations promulgated under any such law, or any successor law, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
   (dd) Neither the Company nor any of its Affiliates has, prior to the date hereof, made any offer or sale of any securities which are required
to be ―integrated‖ pursuant to the Securities Act with the offer and sale of the Rights Shares and Rights Warrants pursuant to the Registration
Statement.
   (ee) There are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or
origination fee or other compensation by the Company with respect to the issuance or exercise of the Rights or the sale of the Rights Shares and
Rights Warrants or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, the Company’s
officers, directors and employees or Affiliates that may affect the Dealer-Manager’s compensation. Except as previously disclosed by the
Company to the Dealer-Manager in writing, no officer, director, or beneficial owner of 5% or more of any class of the Company’s securities
(whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which derived) or any other Affiliate is a
member or a Person associated, or affiliated with a member of FINRA. No proceeds from the exercise of the Rights will be paid to any FINRA
member, or any Persons associated or affiliated with a member of FINRA, except as specifically contemplated herein. Except as previously
disclosed by the Company to the Dealer-Manager, no Person to whom securities of the Company have been privately issued within the 180-day
period prior to the initial filing date of the Registration Statement has any relationship or affiliation or association with any member of FINRA.
   (ff) The Company and its Subsidiaries and any ―employee benefit Plan‖ (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder (collectively, ― ERISA ‖) established or maintained by the
Company, its Subsidiaries or their ERISA Affiliates (as defined below) are in compliance in all material respects with ERISA. ― ERISA
Affiliate ‖ means, with respect to the Company or a Subsidiary, any member of any group of organizations described in Sections 414(b), (c),
(m) or (o) of the Internal Revenue Code of 1986, as amended (the ― Code ‖), to which the Company or a Subsidiary is a member. To the
knowledge of the Company, no ―reportable event‖ (as defined in ERISA) has occurred or is reasonably expected to occur with respect to any
employee benefit plan maintained by the Company, its Subsidiaries or their ERISA Affiliates. No ―employee benefit plan‖ established or
maintained by the Company, its Subsidiaries or any of their ERISA Affiliates, if such ―employee benefit plan‖ were terminated, would have
any ―amount of unfunded benefit liabilities‖ (as defined under ERISA). Neither the Company, its Subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any ―employee benefit plan‖ or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each ―employee benefit plan‖
established or maintained by the Company, its Subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section
401(a) of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such
qualification.
   (gg) There are no contracts, agreements or understandings between the Company and any Person that would give rise to a valid claim
against the Company or the Dealer-Manager for a brokerage commission, finder’s fee or other like payment in connection with the transactions
contemplated by this Agreement. Other than the Dealer-Manager, the Company has not employed any brokers, dealers or underwriters in
connection with solicitation of exercise of Rights in the Rights Offering, and except provided for in Section 6 and 7 hereof, no other
commissions, fees or discounts will be paid by the Company or otherwise in connection with the Rights Offering.

                                                                         9
   (hh) Neither the Company nor, to the Company’s knowledge, any of the Company’s officers, directors, employees or agents has at any time
during the last five years: (i) made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental officer or official, or other Person charged with similar public
or quasi-public duties, other than payments that are not prohibited by the laws of the United States or any jurisdiction thereof.
    (ii) The Company has not and will not, directly or indirectly through any officer, director or Affiliate of the Company or through any other
Person: (i) taken any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the
Rights Shares and Rights Warrants, (ii) since the filing of the Registration Statement sold, bid for or purchased, or paid any Person (other than
the Dealer-Manager) any compensation for soliciting exercises or purchases of, the Rights, the Rights Shares or the Rights Warrants and
(iii) until the later of the expiration of the Rights or the completion of the distribution (within the meaning of Regulation M under the Exchange
Act) of the Rights Shares and the Rights Warrants, sell, bid for or purchase, apply or agree to pay to any Person (other than the
Dealer-Manager) any compensation for soliciting another to purchase any other securities of the Company (except for the solicitation of the
exercises of Rights pursuant to this Agreement). The foregoing shall not apply to the offer, sale, agreement to sell or delivery with respect to:
(i) Rights Shares and Rights Warrants offered and sold upon exercise of the Rights, as described in the Prospectus, or (ii) any shares of
Common Stock sold pursuant to the Company’s employee benefit plans.
As used in this Agreement, the term ― knowledge of the Company ‖ (or similar language) shall mean the knowledge of the executive officers of
the Company who are named in the Prospectus, with the assumption that such officers shall have made reasonable and diligent inquiry of the
matters presented (with reference to what is customary and prudent for the applicable individuals in connection with the discharge by the
applicable individuals of their duties as officers or directors of the Company).
6. Compensation . The Company shall pay to the Dealer-Manager as consideration for services rendered by the Dealer-Manager in its capacity
as financial advisor hereunder and under the Engagement Letter, a fee equal to two percent of the Gross Proceeds from the exercise of Rights in
this Offering and the exercise of the Rights Warrant prior to the expiration thereof, excluding the Gross Proceeds received with respect to
Rights and Rights Warrants exercised by R. Dean Phillips or any Phillips Affiliates. Nothing in this Agreement shall affect the
Dealer-Manager’s rights to receive any other fees set forth in the Engagement Letter in accordance with the terms thereof. All payments to be
made by the Company pursuant to this Section 6 shall be made by wire transfer of immediately available funds on the Expiration Date with
respect to the subscriptions for Rights Shares and the Rights Warrants pursuant to the exercise of Rights and within ten days of the exercise of
any Rights Warrants with respect to any Rights Warrants issued pursuant to the Offering. For purposes hereof, ― Phillips Affiliates ‖ shall mean
those certain entities named in any Schedule 13D filed by Mr. Phillips with the Commission on February 13, 2009 and April 22, 2009 and any
entity in Mr. Phillips or such named entity have in combined ownership a controlling interest, where controlling interest means more than fifty
percent of the voting interests. For avoidance of doubt, the Company represents to the Dealer-Manager that as of the Record Date, to the
knowledge of the Company, R. Dean Phillips and the Phillips Affiliates own not more than 38.5% of the outstanding shares of Common Stock
of the Company. For purposes hereof, ― Gross Proceeds ‖ shall mean the aggregate subscription price, or exercise price in the case of the
exercise of the Rights Warrants, before any fees payable to broker dealers or any other fees and expenses paid or payable by the Company.
7. Expenses . Whether or not any Rights are subscribed for and purchased pursuant to the Rights Offering, the Company shall reimburse the
Dealer-Manager promptly upon demand and receipt of invoices for all reasonably incurred fees, costs and out-of-pocket expenses relating to or
arising out of the Rights Offering, including the reasonable documented fees, costs and expenses of legal counsel to the Dealer-Manager, and
the reasonable documented fees, costs and expenses of any other independent experts retained by the Dealer-Manager with the Company’s
prior written consent in connection with their representation of the Dealer-Manager in connection herewith and with the Rights Offering,
provided that

                                                                         10
such reimbursement pursuant to this Agreement and the Engagement Letter shall not exceed $75,000 in the aggregate (and except for any fees
and expenses of counsel relating to matters covered under Section 11 of this Agreement, the reimbursement of which shall be as set forth in
such Section). The Company also agrees to pay all of its fees, costs and expenses incurred relating to or arising out of the Rights Offering, the
performance of its obligations under this Agreement and the Rights Offering including, without limiting the generality of the foregoing, (i) all
fees and expenses relating to the preparation and printing (including word processing and duplication costs) and filing, mailing and publishing
of the Offer Documents (including all exhibits, amendments and supplements thereto), (ii) all fees and expenses of other persons rendering
services on the Company’s behalf in connection with the Rights Offering, and all fees and expenses relating to the appointment of such
persons, (iii) all advertising charges incurred by the Company in connection with the Rights Offering, including those of any public relations
firm or other person or entity rendering services in connection therewith, (iv) all fees, if any, payable to brokers or dealers in securities
(including MMP), banks, trust companies and other financial intermediaries as reimbursement for their customary mailing and handling
expenses incurred in forwarding the Rights Offering Materials to their customers, (v) all fees and expenses payable in connection with the
registration or qualification of the Rights Shares and Rights Warrants under state securities or blue sky laws, (vi) all listing fees and any other
fees and expenses incurred in connection with the listing on the NYSE Amex of the Rights Shares and (vii) the filing fee of the Financial
Industry Regulatory Authority, Inc. (― FINRA ‖) relating to the Rights Offering; provided , that the fees and expenses described in the above
sentence shall not, for avoidance of doubt, include solicitation commissions payable to broker-dealers. Notwithstanding anything contained
herein to the contrary, all expense payments and reimbursements hereunder, other than the fees payable under subsection (iv) above, shall be
subject to the aggregate expense reimbursement limitation set forth above. For avoidance of doubt, the Company’s obligations to pay any
brokers or dealers hereunder shall be in addition to, and in no way limited by, the fees payable to MMP hereunder or under the Engagement
Letter. The Company is obligated to pay any broker-dealer where the holder exercising the Rights indicates in writing that such broker-dealer
has solicited such exercise, a cash commission not to exceed 3% of the Gross Proceeds from the exercise of such Rights; provided , that no
such commission shall be payable with respect to Rights and Rights Warrants exercised by R. Dean Phillips or any Phillips Affiliates.
8. Shareholder Lists; Subscription Agent; Information Agent .
   (a) The Company will cause the Dealer-Manager to be provided with any cards or lists showing the names and addresses of, and the number
of shares of Common Stock held by, the holders of shares of Common Stock as of a recent date and will use its best efforts to cause the
Dealer-Manager to be advised from time to time during the period, as the Dealer-Manager shall request, of the Rights Offering as to any
transfers of record of shares of Common Stock.
   (b) The Company (i) has arranged for the Subscription Agent to serve as subscription agent in connection with the Rights Offering, (ii) will
arrange for the Subscription Agent to advise the Dealer-Manager regularly as to such matters as the Dealer-Manager may reasonably request,
including the number of Rights that have been exercised, and (iii) will arrange for the Subscription Agent to be responsible for receiving
subscription funds paid.
   (c) The Company has arranged for the Information Agent to serve as information agent in connection with the Rights Offering and to
perform services in connection with the Rights Offering that are customary for an information agent.
9. Covenants of the Company . The Company covenants and agrees with the Dealer-Manager:
   (a) To advise the Dealer-Manager, promptly after it receives notice thereof, of the time when the Registration Statement, or any amendment
thereto, becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Dealer-Manager
with copies thereof; to prepare a Prospectus in a form approved by the Dealer-Manager (such approval not to be unreasonably withheld or
delayed) and to file such Prospectus pursuant to Rule 424(b) under the Securities Act within the time prescribed by such rule; to advise the
Dealer-Manager, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or
suspending the use of any

                                                                         11
Preliminary Prospectus or the Prospectus, of the suspension of the qualification of the Rights for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification, to use promptly its
reasonable best efforts to obtain its withdrawal;
    (b) To deliver promptly to the Dealer-Manager, at any such location as reasonably requested by the Dealer-Manager, such number of the
following documents as the Dealer-Manager shall reasonably request: (i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case excluding exhibits other than this Agreement, any other Offer Documents filed
as exhibits, the computation of the ratio of earnings to fixed charges and the computation of per share earnings), (ii) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus and (iii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if the delivery of a prospectus is required at any time during which the Prospectus relating to the Rights, the
Rights Shares or the Rights Warrants is required to be delivered under the Securities Act and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities
Act or the Exchange Act, to notify the Dealer-Manager and, upon its request, to file such document and to prepare and furnish without charge
to the Dealer-Manager as many copies as the Dealer-Manager may from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such compliance;
   (c) To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Dealer-Manager, be necessary or advisable in connection with the distribution of
the Rights or the sale of the Rights Shares and Rights Warrants or be requested by the Commission;
   (d) Prior to filing with the Commission any: (i) Preliminary Prospectus, (ii) amendment to the Registration Statement, any document
incorporated by reference in the Prospectus or (iii) any Prospectus pursuant to Rule 424 of the Securities Act, to furnish a copy thereof to the
Dealer-Manager and counsel for the Dealer-Manager and obtain the consent of the Dealer-Manager to the filing (which consent shall not be
unreasonably withheld);
   (e) To furnish to the Dealer-Manager copies of all materials not available via EDGAR furnished by the Company to its shareholders and all
public reports and all reports and financial statements furnished by the Company to the principal national securities exchange or automated
quotation markets upon which any of the Company’s securities may be listed or quoted pursuant to requirements of or agreements with such
exchange or to the Commission pursuant to the Exchange Act or any rule or regulation of the Commission thereunder;
    (f) To qualify or register the Rights, the Rights Shares and the Rights Warrants for sale under (or obtain exemptions from the application of)
the state securities or blue sky laws of those jurisdictions reasonably requested by the Dealer-Manager, and to comply with such laws and cause
such qualifications, registrations and exemptions to continue in effect so long as reasonably required for the distribution of the Rights, the
Rights Shares and the Rights Warrants. The Company shall not be required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a
foreign corporation. The Company will advise the Dealer-Manager promptly of the suspension of the qualification or registration of (or any
such exemption relating to) the Rights, the Rights Shares or the Rights Warrants for offering, sale or trading in any jurisdiction or any initiation
or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or

                                                                         12
exemption, the Company shall use its reasonable best efforts to obtain the withdrawal thereof as promptly as practicable;
   (g) To apply the net proceeds from the exercise of the Rights and upon exercise of the Rights Warrants in the manner described under the
caption ―Use of Proceeds‖ in the Prospectus.
   (h) To advise the Dealer-Manager, directly or through the Subscription Agent, from time to time, as the Dealer-Manager shall request, of the
number of Rights Shares and Rights Warrants subscribed for, and arrange for the Subscription Agent to furnish the Dealer-Manager with
copies of written reports it furnishes to the Company concerning the Rights Offering.
  (i) To commence mailing the Offer Documents to record holders of the Common Stock promptly following the Effective Date, and
complete such mailing as soon as practicable;
   (j) To reserve and keep available for issue upon the exercise of the Rights such number of authorized but unissued shares of Rights Shares
and Rights Warrants as will be sufficient to permit the exercise in full of all Rights, except as otherwise contemplated by the Prospectus; and
   (k) To not take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights or
the sale or resale of the Rights Shares or the Rights Warrants.
10. Conditions of Dealer-Manager’s Obligations . The obligations of the Dealer-Manager hereunder are subject to the accuracy, as of the date
hereof and at all times during the Rights Offering, of the representations and warranties of the Company contained herein, to the performance
by the Company of its obligations hereunder and to the following additional conditions:
   (a) (i) The Registration Statement shall have become effective and the Prospectus shall have been timely filed with the Commission in
accordance with the Securities Act; (ii) all post-effective amendments to the Registration Statement shall have become effective; (iii) no stop
order suspending the effectiveness of the Registration Statement or any amendment or supplement thereto shall have been issued and no
proceedings for the issuance of any such order shall have been initiated or threatened, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or otherwise) shall have been disclosed to the Dealer-Manager and
complied with to the Dealer-Manager’s reasonable satisfaction.
  (b) The Dealer-Manager shall not have been advised by the Company and shall not have discovered and disclosed to the Company that the
Registration Statement or the Prospectus or any amendment or supplement thereto, contains an untrue statement of fact which in the
Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material, or omits to state a fact which, in the
Dealer-Manager’s opinion, or in the opinion of counsel to the Dealer-Manager, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
   (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Charter
Amendment, the Rights, the Rights Shares, the Rights Warrants, the Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the
Dealer-Manager, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
    (d) Concurrently with the execution of this Agreement, there shall have been furnished to the Dealer-Manager the signed opinion (addressed
to the Dealer-Manager) of DLA Piper LLP, counsel for the Company, dated as of the Closing and in form and substance reasonably satisfactory
to counsel for the Dealer-Manager.

                                                                         13
   (e) Concurrently with the execution of this Agreement, the Company shall have furnished to the Dealer-Manager a ―comfort letter‖ of BKD,
LLP, addressed to the Dealer-Manager and dated the date hereof: (i) confirming that they are independent registered public accountants of the
Company within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of
accountants under the PCAOB and applicable rules of the Commission, and (ii) containing customary provisions for transactions of this type.
   (f) The Company shall have furnished to the Dealer-Manager a certificate, dated the date hereof, of its Chief Executive Officer or President
and its Chief Financial Officer stating that:
i.     The Charter Amendment shall have become effective in accordance with its terms under the laws of the State of Delaware;

ii.    To the best of their knowledge after reasonable investigation, the representations, warranties, covenants and agreements of the
       Company hereof are true and correct in all material respects;

iii.   Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been
       any Material Adverse Change or any development involving a prospective Material Adverse Change; and

iv.    They have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) the Registration Statement, as of
       the Effective Date, and the Prospectus, as of the date thereof, did not include any untrue statement of a material fact and did not omit to
       state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) since the
       Effective Date or the date of the Prospectus, as applicable, no event has occurred which should have been set forth in a supplement or
       amendment to the Registration Statement or the Prospectus.
    (g) Neither the Company nor any of its Subsidiaries shall have sustained since the date of the latest audited financial statements included in
the Prospectus any Material Adverse Change, the effect of which is, in the judgment of the Dealer-Manager, so material and adverse as to make
it impracticable or inadvisable to proceed with the Rights Offering.
   (h) All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance
with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Dealer-Manager.
11. Indemnification and Contribution .
    (a) The Company agrees to indemnify and hold harmless the Dealer-Manager and its affiliates and any officer, director, employee or agent
of Dealer-Manager or any such affiliates and any Person controlling (within the meaning of Section 20(a) of the Exchange Act) the
Dealer-Manager or any of such affiliates (collectively, the ― DM Indemnified Parties ‖) from and against any and all losses, claims, damages,
liabilities and expenses whatsoever, under the Securities Act or otherwise (as incurred or suffered and including, but not limited to, any and all
legal or other expenses incurred in connection with investigating, preparing to defend or defending any lawsuit, claim or other proceeding,
commenced or threatened, whether or not resulting in any liability, which legal or other expenses shall be reimbursed by the Company
promptly after receipt of any invoices therefore from the Dealer-Manager), arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Offer Documents or any amendment or supplement thereto, in any other solicitation material used
by the Company or authorized by it for use in connection with the Rights Offering, or in any blue sky application or other document prepared
or executed by the Company (or based on any written information furnished by the Company) specifically for the purpose of qualifying any or
all of the Rights, the Rights Shares or the Rights Warrants under the securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a ― Blue Sky Application ‖) or arising out of or based upon the

                                                                        14
omission or alleged omission to state in any such document a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading (other than statements or omissions made in
reliance upon and in conformity with the Dealer-Manager Information), (ii) any withdrawal or termination by the Company of, or failure by the
Company to make or consummate, the Rights Offering, (iii) any actions taken or omitted to be taken by an indemnified party with the consent
of the Company or (iv) any failure by the Company to comply with any agreement or covenant, contained in this Agreement or (B) arising out
of, relating to or in connection with or alleged to arise out of, relate to or be in connection with, the Rights Offering, any of the other
transactions contemplated thereby or the performance of the Dealer-Manager’s services to the Company with respect to the Rights Offering.
The Company will not, however, be responsible under the foregoing indemnity agreement for any losses, claims, damages, liabilities or
expenses that are finally judicially determined to have resulted from the negligence, bad faith or willful misconduct of the Dealer-Manager or
any DM Indemnified Party.
    (b) The Dealer-Manager agrees to indemnify and hold harmless the Company and its affiliates and any officer, director, employee or agent
of the Company or any such affiliates and any Person controlling (within the meaning of Section 20(a) of the Exchange Act) the Company or
any of such affiliates (collectively, the ― Company Indemnified Parties , ‖ and together with the DM Indemnified Parties, the ― Indemnified
Parties ‖) from and against any and all losses, claims, damages, liabilities and expenses whatsoever, under the Securities Act or otherwise (as
incurred or suffered and including, but not limited to, any and all legal or other expenses incurred in connection with investigating, preparing to
defend or defending any lawsuit, claim or other proceeding, commenced or threatened, whether or not resulting in any liability, which legal or
other expenses shall be reimbursed by the Dealer-Manager promptly after receipt of any invoices therefore from the Company), arising out of
or based upon any untrue statement or alleged untrue statement of a material fact contained in the Dealer-Manager Information. The
Dealer-Manager will not, however, be responsible under the foregoing indemnity agreement for any losses, claims, damages, liabilities or
expenses that are finally judicially determined to have resulted from the negligence, bad faith or willful misconduct of the Company or any
Company Indemnified Party.
    (c) If the indemnification provided for in Sections 11(a) and (b) is judicially determined to be unavailable (other than in accordance with the
terms hereof) to any Indemnified Party otherwise entitled to indemnity in respect of any losses, claims, damages or liabilities referred to herein,
then, in lieu of indemnifying such person hereunder, whether or not the Dealer-Manager, on the one hand, or the Company, on the other hand,
is the person entitled to indemnification or reimbursement, the Company or the Dealer-Manager, as the case may be (the ― Indemnifying Party
‖), shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims, damages or liabilities (and
expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits to the Company, on the one hand, and the
Dealer-Manager, on the other hand, of the Rights Offering or (ii) if the allocation provided for in clause (i) above is not available, in such
proportion as is appropriate to reflect not only the relative benefits referred to in such clause (i) but also the relative fault of each of the
Company and the Dealer-Manager, as well as any other relevant equitable considerations; provided, however , in no event shall the
Dealer-Manager’s aggregate contribution to the amount paid or payable exceed the aggregate amount of fees actually received by the
Dealer-Manager under this Agreement. For the purposes of this Agreement, the relative benefits to the Company and to the Dealer-Manager of
the engagement shall be deemed to be in the same proportion as (A) the total value paid or contemplated to be paid or received or contemplated
to be received by the Company in the Rights Offering, whether or not the Rights Offering is consummated, bears to (B) the fees paid or to be
paid to the Dealer-Manager under this Agreement.
    (d) Promptly after the receipt by an Indemnified Party of notice of the commencement of any proceedings for which indemnification may be
sought hereunder (― Proceedings ‖), such Indemnified Party will, if a claim is to be made hereunder against an Indemnifying Party in respect
thereof, notify the Indemnifying Party in writing of the commencement thereof; provided that (i) the failure to so notify the Indemnifying Party
will not relieve it from any liability which it may have hereunder except to the extent it has been materially prejudiced by such failure and
(ii) the failure to so notify the Indemnifying Party will not relieve it from any liability which it may have to an Indemnified Party otherwise
than on account of this indemnity agreement. In case any such Proceedings are brought against any Indemnified Party and it

                                                                        15
notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein and, to the extent
that the Indemnifying Party may elect by written notice delivered to such Indemnified Party, to assume the defense thereof, with counsel
reasonably satisfactory to such Indemnified Party, provided that if the defendants in any such Proceedings include both such Indemnified Party
and the Indemnifying Party and such Indemnified Party shall have concluded that there may be legal defenses available to it which are different
from or additional to those available to the Indemnifying Party , such Indemnified Party shall have the right to select separate counsel to assert
such legal defenses and to otherwise participate in the defense of such Proceedings on behalf of such Indemnified Party. Upon receipt of notice
from the Indemnifying Party, as the case may be, to such Indemnified Party of its election so to assume the defense of such Proceedings and
approval by such Indemnified Party of counsel, the Indemnifying Party shall not be liable to such Indemnified Party for expenses incurred by
such Indemnified Party in connection with the defense thereof (other than reasonable costs of investigation) unless (A) such Indemnified Party
shall have employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that the Indemnifying Party shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel), approved by other party, representing the Indemnified Parties who are parties to such Proceedings),
(B) the Indemnifying Party shall not have employed counsel reasonably satisfactory to such Indemnified Party to represent such Indemnified
Party within a reasonable time after notice to such party of commencement of the Proceedings or (C) the Indemnifying Party has authorized in
writing the employment of counsel for such Indemnified Party.
    (e) Neither party shall be liable for any settlement of any Proceedings effected without such party’s written consent (which consent shall not
be unreasonably withheld or delayed), but if settled with such party’s written consent or if there be a final judgment for the plaintiff in any such
Proceedings, such party agrees to indemnify and hold harmless each Indemnified Party from and against any and all losses, claims, damages,
liabilities and expenses by reason of such settlement or judgment. Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Party shall have requested the indemnifying party to reimburse such Indemnified Party for legal or other expenses in connection
with investigating, responding to or defending any Proceedings as contemplated by this Section 11, the Indemnifying Party shall be liable for
any settlement of any Proceedings effected without the Company’s or Dealer-Manager’s, as the case may be, written consent if (i) such
settlement is entered into more than 60 days after receipt by the indemnifying party of such request for reimbursement and (ii) the
Indemnifying Party shall not have reimbursed such Indemnified Party in accordance with such request prior to the date of such settlement.
   (f) Each party agrees that it will not, without the prior written consent of the Indemnified Party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder unless such settlement, compromise or consent includes an unconditional release, reasonably satisfactory in form and
substance to the Indemnified Party, releasing the Indemnified Party from all liability arising out of such claim, action, suit or proceeding.
12. Effective Date of Agreement; Termination .
   (a) This Agreement shall become effective upon the later of the time on which the Dealer-Manager shall have received notification of the
effectiveness of the Registration Statement and the time which this Agreement shall have been executed by all of the parties hereto.
    (b) This Agreement shall terminate upon the earliest to occur of (i) the consummation, termination or withdrawal of the Rights Offering, and
(ii) the withdrawal by the Dealer-Manager pursuant to Section 4.
13. Survival of Certain Provisions . The agreements contained in Sections 3, 6, 7, 11 and 13 through 21 hereof and the representations,
warranties and agreements of the Company contained in Section 5 hereof shall survive the consummation of or failure to commence the Rights
Offering and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by
or on behalf of any indemnified party.

                                                                         16
14. Notices . All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered personally, or (b) sent by registered or certified mail, return receipt requested, postage prepaid,
to the parties hereto as follows:
         If to the Dealer-Manager :
         McClendon Morrison & Partners, Inc.
         150 North Michigan Avenue, Suite 2800
         Chicago, Illinois 60601
         Attention: Edwin L. McClendon
         With a copy to :
         Connelly Roberts & McGivney LLC
         55 West Monroe, Suite 1700
         Chicago, Illinois 60603
         Attention: Catherine McGivney
         If to the Company :
         Mercantile Bancorp, Inc.
         200 N. 33 rd Street
         Quincy, Illinois 62301
         Attention: Ted T. Awerkamp
         With a copy to :
         DLA Piper LLP
         500 Eighth Street, NW
         Washington, DC 20004
         Attention: Michael P. Reed
         Facsimile: (202) 799-5229
15. Parties . This Agreement shall inure to the benefit of and be binding upon the Dealer-Manager, the Company and their respective
successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those Persons, except that the representations,
warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the Person or
Persons, if any, who control the Dealer-Manager within the meaning of Section 15 of the Act. Nothing in this Agreement shall be construed to
give any Person, other than the Persons referred to in this Section, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
16. Amendment . This Agreement may not be amended or modified except in writing signed by each of the parties hereto.
17. Governing Law; Venue; Waiver of Jury Trial . This Agreement shall be governed by and construed in accordance with the laws of the state
of Illinois. Any right to trial by jury with respect to any action or proceeding arising in connection with or as a result of the engagement of the
Dealer Manager or any matter referred to in this Agreement is hereby waived by the parties. The parties agree that any suit or proceeding
arising in respect of this Agreement or your engagement will be tried exclusively in the U.S. District Court for the Northern District of Illinois
or, if that court does not have subject matter jurisdiction, in any state court located in Cook County and the parties agree to submit to the
jurisdiction of, and to venue in, such courts. Each party hereby agrees on its own behalf and, to the extent permitted by applicable law, on
behalf of their respective security holders, to waive any right to a trial by jury with respect to any claim, counterclaim or action arising out of or
in connection with this agreement or the transaction contemplated hereby

                                                                          17
18. Entire Agreement . This Agreement, together with the exhibits attached hereto and as the same may be amended from time to time in
accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no
other or further agreements outstanding not specifically mentioned herein, except the Engagement Letter to the extent incorporated herein.
19. Severability . If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such
invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall
be valid and enforced to the fullest extent permitted by law.
20. Headings . The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
21. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or
other electronic transmission shall constitute valid and sufficient delivery thereof. If the foregoing correctly sets forth your understanding,
please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.
Please sign and return to us a duplicate of this letter, whereupon it will become a binding agreement.
Very truly yours,

MERCANTILE BANCORP, INC.

By:
       Name:
       Title:

Accepted and agreed as of the date first written above:

 MCCLENDON MORRISON & PARTNERS, INC.

By:
       Name:        Edwin L. McClendon
       Title:       Chief Executive Officer


                                                                         18
                                                                                                                                         Exhibit 8
                                                                                                              DLA Piper LLP (US)
                                                                                                              500 8th Street, NW
                                                                                                              Washington, D.C. 20004
                                                                                                              www.dlapiper.com

                                                                                                              T       202.799.4000
                                                                                                              F       202.799.5000
August 20, 2010
Mercantile Bancorp, Inc.
200 N. 33rd Street
Quincy, Illinois 62301
Ladies and Gentlemen:
We have acted as legal counsel to Mercantile Bancorp, Inc. (the ―Company‖) in connection with the Company’s filing of a registration
statement on Form S-1 (SEC File No. 333-168075) (the ―Registration Statement‖) relating to a distribution by the Company to holders of
shares of the Company’s common stock of certain non-transferable subscription rights to purchase units (the ―Rights Offering‖), with each unit
consisting of one share of Company common stock and one warrant to purchase one share of Company common stock at a specified exercise
price at any time over a five year period, subject to redemption upon certain conditions.
Our opinion set forth below assumes (i) the initial and continuing accuracy of the statements and facts concerning the Rights Offering set forth
in the Registration Statement and (ii) that the transactions related to the Rights Offering will be consummated in the manner contemplated by
the Registration Statement, including without limitation, that the subscription rights to be distributed to the Company’s stockholders pursuant
to the Rights Offering will be distributed strictly in proportion to the number of shares of the Company’s common stock held by each
stockholder of record as of the record date used for determining stockholders eligible to participate in the Rights Offering, and that no
stockholder who is eligible to participate in the Rights Offering may elect to receive money or any other property instead of receiving a
subscription right.
Based upon the foregoing and subject to the limitations, qualifications, exceptions and assumptions set forth herein and in the Registration
Statement, we confirm that the descriptions under the heading ―Material U.S. Federal Income Tax Considerations‖ set forth in the Registration
Statement, to the extent the discussion under that heading in the Registration Statement states matters of law or legal conclusions, constitute our
opinion as to the material United States federal income tax consequences to the Company of issuing the subscription rights, to the stockholders
of the Company of receiving the subscription rights, and to the Company and to the stockholders of the Company of the exercise of the
subscription rights and the expiration of the subscription rights.
The opinion set forth above is expressed as of the date hereof and applies only to the disclosure under the heading ―Material U.S. Federal
Income Tax Considerations‖ set forth in the Registration Statement. This opinion represents and is based upon our best judgment regarding the
application of U.S. federal income tax laws arising under the Code, existing judicial decisions, administrative regulations and published rulings
and procedures. Our opinion is not binding upon the Internal Revenue Service or the courts, and the Internal Revenue Service is not precluded
from successfully asserting a contrary position. Furthermore, no assurance can be given that future legislative, judicial or administrative
changes, on
Mercantile Bancorp, Inc.
August 20, 2010
Page 2
either a prospective or retroactive basis, would not adversely affect the accuracy of the conclusions stated herein. Nevertheless, we undertake
no responsibility to advise you of any new developments in the application or interpretation of the U.S. federal income tax laws.
This opinion letter is provided for use by the Company and the Company stockholders solely in connection with the Rights Offering and may
not be used, circulated, quoted, referred to or otherwise relied upon by any other party or for any other purpose without our express written
consent.
We consent to the filing of this opinion letter as an exhibit to the Registration Statement and all amendments thereto.

Very truly yours,

/s/ DLA Piper LLP (US)
DLA Piper LLP (US)
                                                                                                                                 Exhibit 23.1


                          Consent of Independent Registered Public Accounting Firm
Audit Committee and Board of Directors
Mercantile Bancorp, Inc.
Quincy, Illinois
We consent to the incorporation by reference in this Amendment No. 1 to the Registration Statement of Mercantile Bancorp, Inc. S-1 (File
No. 333-168075) of our report dated April 7, 2010, on our audits of the consolidated financial statements of Mercantile Bancorp, Inc. as of
December 31, 2009 and 2008, and for the years ended December 31, 2009, 2008 and 2007, which report is included in this Annual Report on
Form 10-K. We also consent to the reference to our Firm under the caption ―Experts‖ in such Registration Statement.
/sig/ BKD, LLP
Decatur, Illinois
August 16, 2010